NMP - October 2016 - 78

Getting the Design Right Before You Adopt an LOS n technology, we use the term "architecture" in pretty much the same sense it is used in constructing a building. Careful engineering goes into preparing a project, consisting of many steps that will result in a solid design that can be created to last for years. In the construction industry, nothing is more important than the foundation, as the entire structure depends on a solid base. The same is true in the mortgage industry, and the most important component of a lender's success is the loan origination system, the LOS. One notable building that has been in the news lately is the pricey condominium in San I Francisco, the Millennium Tower. The San Francisco Chronicle reported in August, "The Millennium Tower, a leading symbol of San Francisco's new high-rise and high-end living, is sinking-setting the stage for what could be one of the most contentious and costly real estate legal battles the city has ever seen." The units range from $1.6 million to $10 million-plus, and are owned by the likes of Joe Montana. Incredibly, the building has sunk 16 inches and taken on a northwest tilt of two inches, which is potentially disastrous given its 58-story height. It is hard to imagine a building constructed to rigid California earthquake standards suffering such a foundational problem, but there it NationalMortgageProfessional.com 78 OCTOBER 2016 ■ /BUJPOBM.PSUHBHF1SPGFTTJPOBM.BHB[JOF ■ By Lionel Urban Annual Meeting & Expo A Better Borrroower Exxpperiience Join us at the largest annual gatthering of reverse reverse mortgage pr professio ofessionals nals. Chicago, g IL * Swissotel Chica ago For morree information and to reegisterr, visit NRMLAonline.orrgg is. And it's a vivid illustration of the importance of getting the design right before you adopt. Homework is required For lenders of all sizes, the choice of an LOS is a major decision that impacts everyone in the organization, from ownership and senior management all the way to the most junior members of the team. The effects of the right choice can last for decades, and a poor choice can have adverse effects lasting three to five years or more, depending on how quickly action is taken to correct it. The process can be complex and one that requires significant reflection. Do you take the safe choice that many have followed? Do you buy into marketing hype and publicity that might mask shortfalls in real functionality? Do you approach the decision with sufficient due diligence and analysis? No doubt about it- homework is required, particularly in at least five key areas: ● Components-features and functionality ● Vendors ● Resource requirements ● Vendor strategy ● Price Components This is the obvious place to start when considering an LOS, just as features and equipment would be the best starting point when looking at a new automobile. Understanding the essential components includes gaining knowledge and insight on basic items like the point of sale capabilities (does the system handle retail only, or can it also provide the lead management and follow up required for the consumer direct channel?) The LOS must be intuitive, flexible, customizable and completely reliable. The back office operations have to be fully supported and based on best practices across the industry- which means the system was designed not just by technologists, but by mortgage professionals. Imaging has become essential over the last few years, and all imaging systems are not created equal, especially when it comes to time-consuming steps like document recognition and classification. And reporting is also critical, given the unavoidable climate of regulation; it's not a matter of if a company will be audited by someone, it's when. So in addition to full management reporting on an everyday basis, it is important that lenders have reporting capabilities that let them be fully transparent when auditors arrive. One of the best ways to feel comfortable about the components is to include your company's operators in the evaluation process, not merely the tech staff. Vendors No lender can operate without third-party vendors, so the LOS has to be able to include them in the technology environment. This is accomplished with integrations, a process that has vastly improved over the years, but is one where gremlins delight in creating problems. Does the LOS already have a working slate of vendors integrated, and is it simple to seamlessly integrate the lender's preferred vendors? Are data and document exchanges efficient and trouble free? Can items like appraisals and verifications be ordered automatically or with minimal human intervention? Can incoming data from documents like automated valuation models (AVMs) and credit reports be interpreted without having to put eyes on them? The answers to these and related questions should not be assumed, especially with changes in forms and formats on the horizon for the coming year. Data streams are amazingly reliable, but when variations come in, they must be detected and dealt with in order to avoid defects that affect closings and post-funding reviews. Resource requirements The days of having to have large IT staffs is long gone, thanks to http://www.NationalMortgageProfessional.com http://nrmlaonline.org

Table of Contents for the Digital Edition of NMP - October 2016

Table of Contents
NMP - October 2016 - Cover1
NMP - October 2016 - Cover2
NMP - October 2016 - 1
NMP - October 2016 - Table of Contents
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NMP - October 2016 - Cover3
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