GMD Says Flexibility Is Key to Document Services

To executives at Guardian Mortgage Documents here, the idea of a library housing the vast number of forms and documents that lenders need to make and manage loans sounds a bit old fashioned.

In today's world, GMD's leaders believe that a document management provider has to have the flexibility to adapt documents quickly to meet changing compliance and loan program requirements. And they believe that their online document engine offers the most flexibility to make changes quickly and efficiently across a whole spectrum of documents related to a particular loan.

GMD's goal is to pull time and cost out of document management, explained Tim Anschutz, vice president of marketing at the firm.

He said there is increasing demand in the market for a document servicer provider to have the ability to rapidly adapt documents as a lender's requirements change. Lenders want a provider who can rapidly implement changes across the board in the chain of documents needed for a loan file, he said. The online repository functions as a boilerplate, so that changes made to one part of the system can flow through automatically to all related documents that are affected by any change to the idiosyncrasies of a loan program.

The company's scripting tools control elements of the documents such as data fields, text and other documents so changes can flow through the entire chain of documents. In a more traditional fixed grid system, each document would have to be touched individually anytime a change is made, he said.

"The document engine that we have built is about as close to a real-time or liquid forms engine as you can get," Mr. Anschutz said. "One script can make the change for all of those documents."

Essentially, the documents for a loan file are built as the file is sent through the system, creating efficiencies and lowering the amount of labor required to manage document creation.

Guardian also has a division that provides closing and post-closing solutions, Guardian Mortgage Services, that is proving beneficial to warehouse lenders and servicers that eventually board loans.

In fact, warehouse lenders sometimes require former mortgage brokers who are converting to mortgage bankers to use GMS as part of a process control tool.

Mitch Tanenbaum, chief technology officer at Guardian Mortgage Documents, said the system helps ensure that loans funded by the young mortgage banking firms meet the warehouse lender's requirements so they can be sold cleanly into the secondary market. That doesn't just benefit correspondent lending systems, however. It has retail lending utility as well, he said.

"We can enforce those rules on a uniform basis across all those branches," Mr. Tanenbaum said.

Warehouse lenders also like having an established closing and post-closing vendor involved because the added quality assurance helps ensure that loan files will be saleable in the secondary market.

Guardian's Web-based process helps remove the "nickel and dime chatter" between originators and warehouse providers that weighs down the process, Mr. Anschutz said. He believes Guardian's service can cut chitchat down by 60% to 70%.

Another benefit is using us improves their liquidity, speeding up the loan funding timeline so that warehouse financing can be turned around about 33% faster than previously was the case before clients came to Guardian, he said.

An additional value proposition comes from Guardian's cost structure, Mr. Anschutz said. Lenders only pay for Guardian's services when they use a service, which helps them manage costs without adjusting staffing levels every time the mortgage industry hits a cyclical turn. Outsourcing allows the clients to reduce the administrative and technology staff to manage their document needs.

Guardian offers an application servicer provider environment, rather than selling software that users install on their own machines. Mr. Anschutz says that allows Guardian to put a stronger focus on customer service. Guardian manages changes for its clients in an online environment, rather than forcing the clients to manage everything on their own systems.

He notes that Guardian's IT infrastructure is designed to meet the service requirements of some of the largest banks and lending companies in the U.S. and has been audited by many of those clients for reliability and data security. Those clients want reliability, security and volume throughput to be thoroughly tested, he said. Lenders also want fast turnaround time, especially if problems are found in a document. They want to be able to generate new forms online quickly in order to avoid closing delays.

Reliability is "job No. 1" for a document service provider, he said.

Guardian has two "hardened" data centers that are some 500 miles apart to provide redundancy should one center experience problems.

"We have certainly had customers come to us and say their current provider has had too much down time," Mr. Tanenbaum added.

That problem is particularly important at the end of the month, when lenders often face a large volume of loan closings. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com