Loan Origination Systems – Keeping Small Banks and Community Lenders Competitive

By inflooens on May 11, 2021

Loan Origination Systems – Keeping Small Banks and Community Lenders Competitive


Lending has always been a competitive space, especially for the home loan mortgage segment. It can be difficult, especially for small lenders, to maintain an advantage in the market without tools like Loan Origination Systems. We have discussed the features of Mortgage LOS in our previous blog. Things have drastically changed over the past few years as the market has become more crowded with the rise of FinTech lenders. According to the Business Insider, the share of the Top 5 banks in mortgage originations has fallen from 50% in 2011 to 21% in 2019. This demonstrates the changing industry trends. Small Banks and Community Lenders are not only competing with each other, but with alternative lending agencies. This includes digital giants who want to capitalize on the opportunity. In this blog, we will discuss how Loan Origination Systems can turn around the operations of small banks and community lenders.

Alternative Lending Key Facts

Image 1: Alternative Lending Key Facts

What Small Lenders have going for them

  • Existing Relationships

    Small Banks and Community Lenders have years of experience in lending and know the market well. In many cases, they are established and trusted parts of the community. This is an edge over alternative and bigger lenders. Small lenders can also provide a more personalized experience to customers, which are always appreciated for repeat clientele and referrals.

  • Small Mortgages

    This is a great opportunity for small lenders as bigger financial institutions may not be interested in lending modest mortgages. This serves as a niche for community lenders and small banks.

  • Flexibility

    Historically credit unions and smaller banks are able to provide more competitive rates for lower credit scores compared to bigger lenders.

Enhancing Competitive Edge with Mortgage LOS

As we move towards a more digital world, small lenders must move with the times to stay in the game. Loan Origination Systems can help transform the mortgage lifecycle to build more reliable and efficient processes.

1. Building Relationships

As mentioned earlier, relationships are one of the strong suites of small lenders. To further strengthen these relationships, loan origination systems can help in lead management. From follow-ups and appointments, to campaigns and record keeping, Mortgage LOS can make the task simpler for lenders and make information at your fingertips a real possibility. inflooens is the best mortgage loan origination system that makes data discoverable and easy to use.

2. Competitive Pricing

Traditionally small lenders have a higher flexibility in pricing because there is less red tape. With Loan Origination Systems it is possible to make calculated decisions regarding loan pricing for individual customers. The platform will consider the credit history of the borrower as well as prevalent and predicted market conditions to suggest the best mortgage pricing. This enables lenders to make the best offers without risking too much. inflooens integrates mortgage pricing with mortgage LOS seamlessly to transform the mortgage lifecycle.

3. Automated Workflows

Mortgage Automation can greatly reduce the burden of repetitive tasks. The best loan origination systems allow customization of workflows as suited to any type of lender. This helps in minimization of operational costs and faster application processing. Automated workflows can boost revenue for small lenders by reducing overhead costs and dedicating resources to building customer relationships. To know more about workflow management, read our earlier blog.

4. Streamline Loan Applications

Online applications are increasingly becoming the norm. There are many benefits to this approach. Not only does it allow the customer to apply from any convenient location, but it also reduces the burden of documentation on the lender. The documents and information collected online can be stored in a data repository and reduce errors or delays due to incorrect or lost papers. The best loan origination systems, like inflooens, take the application process even further to scan, verify, and check applications for loan eligibility.

5. Compliance

In a heavily regulated industry, like mortgage, compliance measures account for a significant amount. Especially for small lenders, it may be difficult to be audit-ready and maintain records without incurring huge costs. Technology can assist here as well. inflooens Loan Origination System helps lenders to keep their records up-to-date and be compliant as per the latest regulations at all times.

Mortgage LOS Benefits

Image 2: Mortgage LOS Benefits


Technology in mortgage is here to stay. Big lenders and alternative lenders are heavily invested in technology to drive their growth. Small banks and community lenders must recognize this shift in business and adopt modern loan origination systems to improve their processes and customer experience. This is not only a wise decision for operations and relationships, but also for reducing costs and increasing revenue. inflooens mortgage LOS is flexible, scalable, and economical while providing the best features and tools for lenders.

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