Loan origination systems have in many cases largely been striving to keep up with inordinate demands for functionality during a time when resources are scarce by finding partners to help them extend their abilities.
This is in part because legacy systems have been a challenge not only for LOS vendors but also for “the folks they would partner with,” according to David Kittle, a former Mortgage Bankers Association executive with an origination background who is now working as the senior director of industry relations for forensic audit, fraud prevention and compliance company IMARC.
“The systems out there are just burdened with legacy,” he said. Updates also can be “cumbersome and expensive,” said Kittle. As result, partnerships emerge to mitigate the need for costly build-outs of new functions.
Quality control companies are among key partners for LOS vendors today, in part because regulations may require a third party to handle the function.
“If I own my own company today, I need a solid QC compliance test,” said Kittle, whose company can provide clients as needed with an interfaces to any LOS.
While partners may be needed to handle some functions like compliance, origination systems in some cases still can offer a lot and continue to be the central repository used to process the core data in the origination process.
“Nobody uses 100% of what's offered in an LOS,” he said.
Among other types of functionality originator users might be increasingly looking for in an effort to reach a borrowers are marketing tools such as consumer pricing engines, customer relationship management automation and social media, said Martin Williams, CEO of Acris Technology.
Josh Bopp, founder of FocusIT, a company that provides secure website access to loan origination systems, said some systems are positioned with broader functionality, but ultimately he believes that today “you won't find one provider that is all things to all people.”
Nevertheless, this does remain a goal in the LOS sector.
As noted previously on this publication's website, the common themes of control, consistency and transparency targeted by the various new regulations are creating an increased interest in more loan channel-agnostic mortgage operations and systems.
“I think that is becoming a bigger and bigger driver,” said Tom Mataconis, a vice president at Carlisle & Gallagher Consulting Group, in an interview with this publication.
Regulators, he said, “want to see control. They want to see transparency.” They also have generally indicated they want to see “consistency across channels” and may be looking for it in investigations, according to Mataconis.
There is some potential for that to change, but so far such an approach from the standpoint of automation has been somewhat “elusive,” Mataconis said.
