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7 Questions to ask before you break up with your Mortgage LOS

We spend a great deal of time psychoanalyzing our clients and their relationships with mortgage vendors, most of all, their mortgage loan origination system. When volumes spike and staff become frazzled, the finger pointing begins and often, it is the loan origination system that takes the heat. Most systems are competent and able to produce a compliant loan product when deployed correctly and managed appropriately. But the cold hard truth is that many organizations let their systems ossify (it is a word, look it up). Ossification sets in when you haven’t updated your system to reflect new procedures, leave fees, tax and MI tables as is, and failed to incorporate vendor integrations that may not have been available at deployment – leaving your staff working outside of the system. Nonfeasance is the greatest barrier to LOS success and often leads to premature system replacement.

So, before you think about breaking up with your loan origination system, there are a few questions you may want to ask yourself:

1. Am I looking at the entire relationship from an objective perspective, or am I reacting emotionally to an event that has left me hurt?

Did you have to buy back a loan that was not compliantly produced or forfeit fees on a loan that was not disclosed timely or correctly? You feel angry! What better to blame than the system itself. But before you do, ask yourself this – was your system deployed to accurately and timely produce a compliant loan or do you have manual checkpoints outside of the system that must be vetted and signed off on by your employees prior to consummation? If the answer to this question is “YES” you might want to think about how to better prepare your system to safeguard against painful failures. Integrating accurate tax, fee and MI tables will help to produce accurate disclosures. Incorporating business rules to mitigate missed disclosures or better yet accurately disclosing at point of sale and eliminating human intervention for initial disclosures, will safeguard against typical mortgage process failures. 

2. Am I expecting my system to fill a void only I can?

A system is only as good as the people who program and care for it. If your system is failing it may not be because it is inherently deficient but rather, it may not be operating as intended by the manufacturer. Often a lender will move a competent process person into the position of system administrator without providing ample training or expecting certification. Mortgage integrations have become complicated and intricate. While a good process person might be adept at simple administrative tasks, identifying digital and other optimization opportunities is likely beyond the scope of their ability.

3. What do I need to be happy and what can I do to bring that into the relationship?

Do you routinely conduct assessments of your needs and process? Are you committed to continuous process improvement? Has your volume increased while your system remains as installed? The loan origination system is like a car, you can’t drive your four kids around in the MG Midget you bought in college – and you cannot scale your mortgage operation on a system that is not upgraded. Taking time to understand what's needed to meet your organization’s current and future needs is essential to assessing the adequacy of your current system. A strategic and technical roadmap is an excellent starting point.

4. Am I truly happy in my partnership and would I be happier out of it?

Maybe your system seems sufficient. But if you discover that your employees spend hours each day outside of the system gathering data and documents because your system does not have relationships with the vendors you do business with, you might want to ask if this is the loan origination system for your or if your would be happier moving on to a new system with broader vendor choices.

5. Are we still growing?

2015 was a watershed year in mortgage technology as vendors fought to provide compliant technology in anticipation of Dodd-Frank. That year separated the men from the boys so to speak, and some vendors have played catch up ever since. There has been an explosion in available technology and API integration points from vendors who kept apace. If you are still originating on a system that is the little engine that could but isn’t the little engine that will take you where you need to go into the future, then a request for proposal process is appropriate. If your vendor is not leaning into a truly digital experience, you will find yourself behind the 8 ball and your relationship is at a stalemate.

6. Does my partner add to or subtract from me?

If staff spends a lot of time making up for system quirks, that is not time well spent. Dual data entry, dueling data fields, restricted data access, reporting limitations, inadequate vendors to integrate, these are the costly limitations that impact your ability to deliver excellence. Understanding what your system can deliver before you decide to move on is an integral step.

7. Would you want someone you loved to be in a relationship with the you the way you are with right now?

Sometimes we all must look in the mirror. Are your processes manual? Employees still locking mortgage files in a cabinet before they turn out the lights? Staff struggling with working remotely because paper is being delivered to the office from appraisal and title vendors? HMDA is a hair on fire event? Internal audits have unresolved issues year over year? Dreading a visit from your examiner because your end of month process is not stable and operations cannot adequately explain process anomalies? Borrower complaints are frequent and consistent? NO SYSTEM WILL SOLVE THESE PROBLEMS. If you simply repeat past behavior, you will program your new system to incorporate or mimic the manual processes you have been doing all along. A fresh approach may be needed, but first you must re-examine the way you do business today.

While incorporating a new loan origination system into an existing operation can create stress and anxiety, it also presents enormous opportunity to self-reflect and grow. Understanding current process and anticipating future needs are conditions precedent to drafting a request for proposal.  And if you are really lucky, you just might find that your current system has all the bells and whistles you need to get the job done your way. 

Mountain View Advisors provides the tools you need to understand your technology needs. Please visit our website at or email us at to learn more.

Mountain View Advisors, LLC. offers a full range of advisory services including, Executive and Strategic, Operations and Technology, Process and Knowledge Management and Financial and Capital Markets. As a data-driven consultancy, Mountain View guides our clients to make smart strategic decisions, solve complex challenges, streamline operations, improve profitability and accelerate growth.

Our 1-3-5 design system prepares clients for near term incremental improvements (moving from reactive to proactive to stable) and long term operational and strategic successes (becoming truly innovative). We can dive deeply into your processes and technology and work closely with your staff to understand organizational capabilities. Our highly regarded Minion Mentorship program provides knowledge transfer and collaboration between our staff and your high potential employees. We become an extension of your team and in turn, your high potential staff becomes an extension of our team for the duration of the engagement. We have walked your path and understand the challenges key leaders face and the opportunities presented when organizational enrichments are warranted.

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