Next Update of Mortgage Builder Sets Sights on Millennials

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One of Larry Alston's goals when he was brought in by Altisource in January to run Mortgage Builder just three months after its acquisition was to make noticeable progress in building its next-generation loan origination system.

The last overhaul of Mortgage Builder's LOS and servicing technology came in 2012.

The work is ongoing, but the vision of what lies ahead is getting clearer as the company listens to its customers, he said.

"We think, and still believe, that Mortgage Builder is going to be a very key component to Altisource's overall strategy in the originations space," Alston said.

"I wouldn't say [Mortgage Builder] was lacking anything that our customers need today. The definition of what an LOS needs to be in five years is very different than what it is today."

The millennial generation is expecting something different than the current mortgage process. So the platform is going to have "self-directed origination" capabilities, he said.

That means consumers will be able to take more control of the early phases of the transaction if they desire. The loan officer should not have to order the title search and the home inspection, Alston said, and there is no reason why papers should still need to be exchanged between consumers and mortgage companies. For example, borrowers could take pictures of their W-2s with their phones and upload them to the LOS.

Mortgage Builder already has an imaging and document-management platform called Blueprint, and it has e-sign capabilities. Blueprint is a private-label implementation of XDoc, the electronic document management system developed by Axacore, which recently merged with another vendor, Scrypt.

So "it is making sure they are all integrated together and they are actually easy to use — so they won't need a loan officer to actually use those apps," Alston explained. "Any user can do them."

There is "no reason why originating a mortgage shouldn't be as easy" as online banking, he said.

Still, Alston realizes that most people want some sort of human contact when getting a mortgage, a fact borne out by the results of a recent Ipsos/Wells Fargo Home Mortgage survey.

While 57% only wanted to interact with their lenders in person, 29% said they preferred a mix of personal, online and phone contact. Preferences were similar in different age groups: 27% of 18- to 34-year-olds and 29% of 35- to 54-year-olds wanted the mixed contact; just 9% and 13% of each age group respectively wanted online contact only.

There were other executives Altisource added to the team at the same time as Alston to help meet its goals. These included Alex Harwitz, vice president of product management, and Jeff Klofft, chief technology officer.

"We were brought on to essentially help the Mortgage Builder team get to the next level. One of the primary goals for 2015 is to ensure that we first deliver on the expectations of our customer base for [TILA-Respa Integrated Disclosures] and we rebuild those processes that will allow the company to scale and make demonstrable progress on that next generation LOS, which we will do in phases, obviously."

Altisource, which was spun off from Ocwen in August 2009, has made investments in a number of mortgage industry businesses, including the management company for the Lenders One co-operative in 2010.

Mortgage Builder was already a preferred partner of Lenders One when Altisource acquired Mortgage Builder last year. Lenders One members are approximately 25% of the user base.

"To achieve the goals I articulated earlier, we are going to be working closely with Lenders One to ensure that that the co-operative's members understand who Mortgage Builder is and the benefits of moving to the platform over time because of the investments we are making," Alston said.

There are also plans to align the Colonnade servicing platform more with the LOS. Lenders typically need the ability to service loans for a short period after origination until sold in the secondary market, and Colonnade — if it is integrated with Mortgage Builder in the correct way — could be a differentiator in the marketplace for the LOS, Alston said. The two systems right now are at arm's length.

When asked if Ocwen might become a Colonnade customer, Alston said there was virtually no chance; right now, Ocwen uses another Altisource-owned platform, RealServicing.

Meanwhile, Altisource is issuing a TRID compliance update for the LOS, sticking to plans to roll it out in advance of the original Aug. 1 deadline.

As part of its July 21-23 user conference in Detroit, Mortgage Builder will be holding TRID training sessions. Right now, the level of comprehension in the industry is very low. "Unless they were paying attention I think that people were surprised by how many business processes internally they were going to have to change.

"Our software can only do so much. Our software can't help people change their own business processes; they have to do that on their own," Alston said.

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Mortgage technology Underwriting Originations E-docs LOS Servicing systems
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