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"Enabling our customers to create and operate a zero-defect mortgage manufacturing platform is a primary objective," says VirPack's Cy Brinn.
"Enabling our customers to create and operate a zero-defect mortgage manufacturing platform is a primary objective," says VirPack's Cy Brinn.

VirPack Aims to Build Mortgage Doc 'Manufacturing Platform'

MAR 18, 2014 1:05pm ET
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Aiming to build a "mortgage loan manufacturing platform," VirPack is enhancing its document management and delivery system to support the documentation requirements of more steps in the origination process.

Such a platform would allow originators to manage paperwork more efficiently than if they were to use a loan origination system or any other technology with generic document capture capabilities, says Cy Brinn, the Vienna, Va., vendor's chief operating officer. Technology providers have done little so far to help mortgage lenders deal more efficiently with the growing amount of paper needed to originate a loan, Brinn claims.

While this all-in-one system won't replace any lender's loan origination system, the enhancements come as lenders look for ways to streamline operations amid depressed loan demand and mounting regulatory requirements. Originators have other reasons for wanting to reorganize their loan creation process, including cutting down on paper and adding production channels.

"We are busier than we have ever been with companies who are looking to invest in a new LOS or enhance the features of their existing LOS," says Len Tichy, who manages the LOS procurement practice for the Stratmor Group consulting firm in Peachtree, Ga.

As part of the creation of a technology designed to cover the whole mortgage manufacturing process, VirPack's Document Management and Delivery System 3.3 includes automated document indexing and a mortgage origination database.

Other new features in the latest version of VirPack's flagship software include task management and document checklists; origination status tracking; automated workflow management; an originator portal' and an origination service ordering and document receipt tool.

The vendor thinks it can meet lender needs by creating a system which manages the various tasks that must be completed to move a loan through the origination pipeline, giving its customers great efficiency gains as a result.

"We are just scratching the surface," Brinn says. "We intend to add quite a bit more functionality to drive more efficiency."

The secondary market would pay more and relax certain contractual terms if it could get a zero-defect loan. But right now, 70% of loans sold in the secondary market have some sort of defect, according to LoanLogics, of Fort Washington, Pa.

"Enabling our customers to create and operate a zero-defect mortgage manufacturing platform is a primary objective of VirPack," says Brinn. "To do so, it is imperative that mortgage originators have maximum automation and collaborative system integration for document capture, recognition, indexing and delivery between borrowers, origination professionals, processors, underwriters, closers, shippers, investors and origination service providers."

The automated document indexing part of the platform uses optical character recognition and other kinds of recognition technology. As images come into the system, it can identify what document it is, which loan it goes with, and where it goes in the loan's file folder and subfolder. No human labor has to be spent doing the indexing. Originators can save between 15 to 30 minutes per loan with this automation. It improves turnaround time and gets the loan off the warehouse line quicker, Brinn says.

The company has just announced an interface with StreetLinks, an appraisal management company based in Indianapolis. The deal allows StreetLinks to deliver an appraisal directly into the correct customer folder in VirPack's platform.

In this particular case, the measurable time savings can be as much as 10 to 15 minutes per loan because the data does not have to be manually entered into the system.

But beyond that, it takes several days for the back office to enter the data into a file once the appraisal is received and more time to make sure the person handling the file is notified that the appraisal is in.

Lenders need this efficiency to remain competitive in this highly aggressive marketplace, Brinn says.

Most LOS's, if they have any doc management capability at all, is rudimentary. In his 25 years of experience, no matter if is paper or electronic, "the documents still drive the process," he adds.

The LOS providers VirPack works with have fallen into three categories, Brinn says. First are those that equate the customer's success with its own accomplishments.

"This category of LOS provider has each customer's best interest in mind. They are highly focused on helping each of their customers create the ideal mortgage production platform to serve the unique requirements of each individual customer," he says.

In this first group, Brinn includes his former company PCLender, which is said to be up for sale by owner Black Knight Financial Services.

The next group consists of those which want to be somewhat helpful with integration. "This category of LOS provider generally seems to appreciate the need for each customer to integrate to increase efficiency and effectiveness," he explains. While they don't go "above and beyond," they create tools to let their customer interface with other providers.

The final category seems to have the mindset that they intend to give their customers the software functionality that the providers believe is efficient and effective, Brinn explains.

There are also benefits when it comes to audits and examinations. If investors and auditors want to see a file, it can take up to an hour to assemble manually or semi-automatically, Brinn says.

The VirPack system assembles the document files in the order the examiner wants and then ships them to the appropriate location where the examination or audit is taking place.

The company's latest step is the creation of the VirPack Partner Network. This provides lenders and servicers with the ability to order and receive services throughout the loan life cycle directly through the document management platform.

As for the future, VirPack is working on putting an automated underwriting system into its platform. "Customers have asked us to give them the same type of efficiency we give elsewhere" into underwriting, he says. This is likely to be released in July.

In June, VirPack plans to release a borrower portal where consumers can securely upload requested documents. The portal will also provide automated, real-time status updates via text message and email to reduce the number of phone calls that underwriters and processors typically receive from loan officers and borrowers checking on a loan's status.

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