As he tried to dispel the idea that end-to-end loan origination systems don’t exist, the product management group director at Calyx Software said there are two basic types of full-service LOS technology that have pros and cons.
The “all-in-one” LOS has the pieces in place that incorporate every step of the origination process, while “best of breed” systems incorporate more choice for lenders, said Ted Hicks during a session at a technology conference last month in Las Vegas.
Originating a mortgage is like a vehicle assembly line, he explained. Car manufacturers may put their logo on the car radio, but the part isn’t made in that factory. Similarly, Hicks said higher-level functions of origination, like credit check, appraisal and other steps in the underwriting process, are brought into the LOS from third parties.
With an all-in-one LOS, there are fewer options for those services, but good LOS platforms have higher-functioning integrations. The best-of-breed approach gives lenders more choice in selecting which vendors and technology to use, but comes at the potential expense of less robust integration. But not all-in-one service providers have the deep integrations they claim to possess.
“There’s no choice; you have to use their services even if you want to use someone else’s,” he said.
The downside for lenders with the best-of-breed approach is that they have to work with more providers, and it takes more effort by more companies to resolve any issues that come up, he added.
With either type of end-to-end system, lenders get the ability to run analytics on their lending operation from a single system, added Tate Kesner, a Calyx sales supervisor who provided a demonstration of the company’s LOS and its third-party integrations.
“Everyone pictures us as just an LOS company, but we’ve gone way past that with our integrations,” Kesner said.
