With a possible impact of the upcoming US presidential elections, Origination Fees and Discount Points for 15-Year Fixed Rate Mortgage in the United States was 0.60% in October 2020, according to the United States Federal Reserve. Loan Origination is a key part of the Mortgage lifecycle and is the hardest for Mortgage Process Automation. Each element of the origination process has to be digitalized and automated. For more on Transforming Mortgage Lifecycle by incorporating Mortgage Process automation, read our previous blog.
Figure 1: Origination Fees and Discount Points for 1-Year Fixed Rate Mortgage Image: https://tradingeconomics.com/united-states/origination-fees-and-discount-points-for-15-year-fixed-rate-mortgage-in-the-united-states-fed-data.html
When a loan servicing system is not living up to its promise, it is time for a change. Even an aging loan origination technology that is not up-to-date causes hassles to lenders. Investing in a Mortgage Loan Origination System (LOS) that caters to business needs efficiently and seamlessly is the need of the hour. Read about Mortgage LOS and its key features in our blog on Mortgage LOS.
Loan Origination System Software
The global loan origination software market is presumed to reach USD 8.1 million by 2029, growing at a CAGR of 13.2%. With a growing and promising market, there are more than 100 Mortgage LOS providers. But, choosing the right Loan Origination System (LOS) is not an easy task.
Figure 2: Global LOS market Image: https://straitsresearch.com/report/loan-origination-software-market
With careful planning and research, the right Loan Origination Software can be chosen, which integrates with other business systems. By selecting the full-suite Mortgage LOS, there is increased efficiency in the lending process, and operational risks mitigated. The right Mortgage LOS should be capable of supporting end-to-end mortgage origination automation processes. Infloeens’ Mortgage LOS enhances customer experience and reduces risk by using next-generation automation.
1. Cost and TimeDepending on the ownership models (SaaS, ASP, hosted in-house), customization, scale, maintenance, licensing, and development, the total cost of ownership increases. The above factors lead to a rise in the expenditure of LOS implementation. Some experts claim LOS implementation usually costs about 2 to 60 million USD. Based on the business dynamics, the Loan Origination System has to also fit into the time frame, and the time to market should be fast and easy to implement. inflooens offers a Loan Origination System that fits your budget and has fast deployment.
2. Business model and IntegrationsBased on next-generation business models, lenders are delivering products and services to customers. These business models function on AI platforms and ML algorithms. To deploy seamless operations of mortgage LOS, lenders need to choose a system that integrates easily with their existing business model. Inflooens has integrated LOS with embedded CRM tools and plug-ins. There are some benefits of integrating LOS with CRM such as quicker loan disposals, borrower’s information at your fingertips, faster underwriting, and optimized operational cost.
3. Technology architectureAdaptive technology with good IT architecture is one of the factors. API-based connectivity, cloud-hosted platforms, configurable business rules, and robust data architecture are vital features of a good IT architecture. It helps lenders to reuse solution components, add new capabilities, and reduce costs in a good LOS. inflooens is a reliable and efficient platform with robust technological features.
4. Regulatory complianceThere is a need to validate the Mortgage LOS platform’s compliance. It essential that the Mortgage LOS is compliant with the federal regulations of the mortgage industry. inflooens offers a convenient and superior platform that incorporates Mortgage Audits and compliance.
5. Customization,ConfigurationImplementation of the Right Mortgage LOS for business requires to plug any gaps in the LOS platform. Customization of a Mortgage LOS platform is expensive as it requires product training by professionals. Having a configurable LOS platform will enable lenders to manage the product, pricing, business rules, and user rights at the functional level.inflooens brings an actionable and empowering Mortgage LOS platform that can be customized as per your needs.
6. Data GovernanceAs per the FHFA requirements, lenders should have data management policies and procedures in place. These policies are to ensure that the confidentiality, security, and usage of data is reliable at all times. The right Mortgage LOS platform has to have flexible options that protect data with incorporated built-in security features. inflooens provides intuitive and impactful data dashboards to give information at your fingertips.
Influencing factorsfor selecting the right Mortgage LOS
Selection of the right Mortgage LOS
The selection process for finding the LOS that is the “best fit” for the lenders is based broadly on four phases
Figure 3: Selection process for theright Mortgage LOS Image: https://tradingeconomics.com/united-states/origination-fees-and-discount-points-for-15-year-fixed-rate-mortgage-in-the-united-states-fed-data.html
Investing in a Mortgage Loan Origination System is a significant decision. Selecting the right mortgage LOS that delivers quality loans, improves the Mortgage Lifecycle, and helps lenders. Lenders or mortgage companies need to choose an up to date and integrated Mortgage LOS. This LOS platform should fit the overall needs of the business and save significant investment, time, and cost to the lenders. Inflooens has integrated LOS with embedded CRM tools and plug-ins. The best Mortgage LOS capable of supporting the current and future needs of the Mortgage Industry.