Web-Based Technology For Lenders And Settlement Service Providers

With the shrinking refinance boom and pressure to bundle loan and settlement costs into a single, guaranteed package, lenders and settlement service providers are looking for ways to lower costs while reducing the time it takes to process loans. How will the application of new, robust, Web-based technology enable lenders and settlement service providers to work together to stay ahead of the curve?

There stands today a clear market demand for the simplification of the real estate mortgage closing process. Department of Housing and Urban Development (HUD) Secretary Mel Martinez has been the catalyst in elevating the discussion of bundling as the means by which to simplify the process and, in turn, meet this demand. As consumers continue to make their voices heard, legislative and regulatory officials are listening. So are mortgage lenders and settlement service providers, and they are responding with new and innovative ways to meet the demand for change.

Bundling will ultimately allow consumers to shop and compare loan packages among various lenders. That, coupled with the slowing of the refinance boom, means lenders will have to work harder to compete for business. They will have to look for new ways to lower costs-beyond yield spreads and interest rates. They will need to provide better service while reducing the time it takes to process and close loans. Settlement service providers who can provide multiple products and bundled packages to lenders at faster speeds will be much better positioned to survive in this new environment.

The application of new, robust demand-side lender technology with complementing supply-side vendor technology will enable lenders and settlement service providers to work together to stay ahead of the curve and meet emerging market needs.

Web Services-Based Order Management And Delivery Systems

Costly custom interfaces between proprietary software and technology platforms are quickly becoming obsolete with the move toward Web services-based order management and delivery systems. Today's vendor access networks and settlement service product procurement platforms simply do not provide the capability to effectively support and facilitate bundling and Guaranteed Mortgage Package Agreement (GMPA) offerings. Current systems are limited in functionality to vendor management functions (vendor selection, contract negotiation, service-level agreements and performance reporting), transaction management functions and electronic commerce capabilities (order routing and vendor connectivity). To effectively support bundling and GMPA offerings, the platforms need to support ordering and management of multiple products and also facilitate real-time product quotes.

Automated Decisioning

In addition to providing for Web services-based integrations, systems need to be able to reduce the number of manual decisions by incorporating an automated decisioning module that can be programmed with lender-specific rules and requirements. The decisioning module should allow lenders to automatically conduct an initial loan risk assessment, and associate loan risk with bundles that satisfy predetermined underwriting and investor guidelines. The system should be able to request and receive real-time quotes, place and receive orders-all automated, with a decisioning capability factored into the process.

On the supply side, vendors must be able to provide comprehensive and dynamic product and bundled offerings with guaranteed price quotes, as well as provide non-settlement service costs reflected on a HUD-1. The vendor systems must be able to receive and respond to requests for real-time quotes for single and bundled products, have automated product and bundle decisioning capability, convert quotes to orders and provide data for GMPA assembly (including impounds, third-party services and pre-pays).

Today, invoice reconciliation is an expensive and largely manual process for lenders. Demand-side applications with electronic invoice reconciliation functionality, coupled with supply-side applications with electronic invoicing capabilities, can provide substantial cost savings to lenders and also allow for easier HUD-1 reconciliation at closing.

Next-Generation Sourcing Platform

For The Mortgage Industry

SourceMaster is an example of how decisioning technologies are being leveraged by mortgage loan originators. Developed by Dorado and offered through First American, SourceMaster is an open, next-generation sourcing platform for the mortgage industry. It is the first of its kind to provide a full suite of vendor and transaction management tools with decisioning capabilities, and has advanced bundling capability to meet current and emerging market opportunities. SourceMaster empowers the lender to connect with any vendor, either directly or via a Vendor Access Network, making the platform truly "open."

SourceMaster meets lenders' needs better than the current generation of sourcing platforms. It provides, for example, immediate cost savings because it is a commercial solution that doesn't require custom development. It also provides a scalable workflow engine as well as flexibility in its rule and policy enforcement options. This state-of-the-art technology architecture is scalable, robust and extensible.

In conjunction with SourceMaster, First American has developed First American Web Services (FAWS), which enables disparate computer systems to interoperate easily and quickly. FAWS decreases integration development and ongoing maintenance costs for the lender. It provides lenders a central access point to all First American products and services using a common format.

FAWS also provides lenders with a central portal to place, manage and track orders. The lender LOS and POS systems can be easily integrated with FAWS to facilitate seamless product ordering and tracking.

Taking eCommerce

An Evolution Forward

The automation of complex decisioning rules takes eCommerce an evolution forward, reducing processing time from days or weeks to seconds. SourceMaster enables lenders to configure complex product decisioning rules based on initial loan file parameters or data elements from previously ordered products such as credit reports and AVMs. The product decisioning rules allow the lender to pre-set automatic ordering of a single product or a bundled set of products. Additionally, SourceMaster also houses complex vendor decisioning rules to determine the appropriate vendor based on product/bundle availability, price, turn time and vendor quality. The rule sets for product and vendor decisioning can be controlled and fine tuned by the lender in real-time using a user-friendly Web-based interface.

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