Historically, software integrations between companies has only been available to larger lenders due to the high costs of development and implementing integration solutions—which until recently amounted to hundreds of thousands of dollars. Smaller lenders were left in the dark, and were unable to reap the many benefits that integrations can bring for businesses.
For example, smaller lenders have been stuck manually entering in data for every order they have, which takes around five minutes per order. Say they have 5,000 orders to complete over the year, this would take their team around 417 man hours to finish and would end up costing approximately $20,000 in overhead. An integration would end this manual process for lenders because everything is automated—costing only $5,000 for the same 5,000 orders.
Fortunately, the rise of software-as-a-service applications has leveled the playing field in terms of affordability and has given companies of all sizes the chance to utilize the benefits of integrating with one another. These integrations provide cost efficiencies and accuracy for both lenders and their business partners by automating business processes that can span multiple systems, eliminating the costly and error-prone process of manually re-entering data and allowing for faster responsiveness to the changing mortgage market. They also make software far more efficient and user-friendly, thanks to their streamlined approach and will help increase business revenues as a result of fewer steps and reduced training needs.
Many vendors in the mortgage sector have recognized that they can serve their lending community better by integrating best-of-breed solutions to maximize efficiency and reduce cost. These visionaries have supported and embraced initiatives like the Mortgage Industry Standards Maintenance Organization to help push the industry forward through technology, partnerships and cooperation. By bringing all sectors of the industry together—like title, flood, valuation and credit—we have seen a significant reduction in cost and tremendous boosts in productivity, which has lowered the total cost of technology enterprisewide.
With all the evidence clearly demonstrating the benefits of technology integrations, it’s surprising that certain sectors are still resistant to implement them. In the valuation sector, there are many proprietary formats that certain vendors employ to try to maintain their segment of the market. However, as a result of the UCDP initiative, we have witnessed the sweeping changes by a de facto standardization. These changes have given the lending community numerous choices, in which they can receive appraisals from any vendor that can produce a MISMO 2.6 file. This has allowed lenders to develop a consistent method in receiving, reviewing, and delivering appraisal reports to the government-sponsored enterprises.
Considering that a loan origination system is at the core of an originator’s workflow, it is easy to see the importance of integrating with them to ensure efficiencies and a cohesive user experience. Most LOS’s provide a method of acquiring various services without the need to rekey additional info. These types of integrations are typically supported by other technology vendors via Web services, which gives the user a familiar interface even though all the actual processing may be happening through a different system. These tightly knit solutions offered by premium LOS vendors have a small learning curve and a large productivity boost as a result.
Service vendors that provide “three-point integrations,” which allow orders to be sent to a specific vendor, statuses to be received from a specific vendor and provides the lender with the final report or deliverable, will have a significant advantage in the future. In order to help keep the mortgage industry moving forward, software companies that provide technology for services like appraisals, flood, or title need to start working together to make their software more flexible and integrated.
