Roadmap for a Sustainable Mortgage Loan Origination System

By inflooens on March 9, 2021

roadmap for a sustainable mortgage loan origination system


Investment in a Mortgage Loan Origination System is a huge commitment for any lending institution. While Fintech Startups have provided Loan Origination Systems that help in increasing lender productivity and responsiveness, these systems need careful planning for successful implementation and sustenance. To know more about how Loan Origination Systems benefit the Mortgage Industry, check out our blog on the topic. Some studies suggest that 35% of all Loan Origination System implementations fail while 65% exceed their budgets. This is more a commentary on the lack of preparation and well-thought-out roadmap rather than the technology itself. No matter how good the technology, the implementation is critical for systems to succeed. In this blog, we will talk about the challenges to implementing a loan origination system and roadmaps for the best Mortgage LOS.

los implementation facts

Image 1 - LOS Implementation Facts

Challenges to Loan Origination System Implementation

  • Organizational Alignment

    The thing with implementing a new Loan Origination System is that the benefits can only be seen after 8 to 24 months. The organizational leadership must be aligned to tackle any challenges that may present during the initial period of the system. The need is for well-developed goals and objectives to enable a more effective outcome.
  • Timelines and Costs

    Many organizations underestimate the time and resource commitment required for a considerable undertaking like the best mortgage LOS. Such miscalculations may be counted as delays and increased costs and result in implementation failure. Organizations need to understand the time and costs associated with the Loan Origination System and closely monitor it to keep on track.

  • Skills

    Inability to adapt, learn, implement, and operate a new system or platform will definitely result in the system’s failure. Lending organizations need the right mix of technical expertise and industry experience to make sure that the best Mortgage LOS is smoothly implemented.
  • Collaboration

    The best mortgage LOS implementation requires a collaborative culture within the organization. Realignment of resources is possible during implementation and needs to be handled by the lender’s teams proactively. Expectations need to be set from the get-go to make loan origination system implementation successful.
  • los implementation challenges

    Image 2 - LOS Implementation Challenges

    Loan Origination System Roadmap

    Each lending organization is different and has its own culture, processes, and protocols. This is why the LOS roadmap needs to be customized to fit the organizational needs.

  • Program Management

    Program management controls the entire operations of loan origination system implementation. It should ensure that teams from loan officers to senior management are in the loop. Communication should be possible from top-down and bottom-up for transparency so that challenges and impediments can be promptly identified and tackled without loss of time and resources.
  • Timelines and Milestones

    Set timeline and milestones enable the organization to work towards a common goal and keeps the loan origination system implementation on track. These days the agile approach is popular for its flexibility and swift deliveries. The schedules should be communicated to all stakeholders by the project management team.
  • Workflow Management

    The LOS lifecycle has several workflows within it that govern stages of the process like loan application, underwriting, approval, post-close, etc. We have discussed this in detail in our earlier blog. Workflow management is required for smooth processes and efficient operations.
  • Teams

    Multiple teams are involved in the loan origination process. The best mortgage LOS roadmap aims to connect all teams to internal and external systems. IT and business teams with the necessary skill sets need to be aligned for the Loan Origination System to deliver the desired results.
  • Infrastructure

    Loan Origination Systems are designed to handle large volumes of data. The organizational leadership needs to decide what type of infrastructure they need for data storage and handling. Conventionally on-premise systems are used that need investment in infrastructure and dedicated IT teams. The more contemporary approach is cloud-based systems that are scalable, secure, and cost-effective.
  • Compliance

    The mortgage industry is heavily regulated and lenders are subject to documentation and record-keeping. We have previously discussed how the best mortgage LOS will help organizations be compliant and audit-ready. Quality control should be set up during implementation to ensure that the regulatory criteria are met.
  • Release and Post-implementation Plans

    A roll-out strategy is necessary along with a small pilot phase where any glitches or issues in the system can be corrected based on user feedback. This also enables the lender to check if the system would be acceptable throughout the organization. Like any new system, a new loan origination system will have a learning curve for all stakeholders involved. For post-implementation, the organization should be ready with well-trained staff or a help desk that would address any queries regarding this.
  • Choice of Vendor

    This is perhaps the most important part of the roadmap. The lending organizations need to choose the best mortgage LOS provider in the market. Thorough research and should be conducted to study the features of the platform, quality of service, and reliability of the vendor. inflooens is the best mortgage LOS provider and has a team of loan specialists that ensure a reliable and efficient platform that can be customized as per the lender’s requirements
Components of LOS Roadmap

Image 3 - Components of LOS Roadmap

Looking Ahead

Implementing a loan origination system is a long and complex process that involves the coordination of multiple teams and processes. Having a roadmap is a good start to ensuring that the LOS investment is beneficial to the organization. Fintech startups like inflooens provide the required support with robust platforms that can be customized and easily incorporated into the organizational procedures.

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