Due to the coronavirus pandemic, the unemployment rate is high though some businesses have been opening up. Loan Originations have decreased to 48% in the second quarter of 2020. All property types showed a decline in the second quarter in commercial/multifamily lending volumes when compared to the second quarter of 2019.
However, due to low mortgage rates, there has been an increase in the total loan origination volumes. According to the Mortgage Bankers Association (MBA) finance forecast, announced on October 21, 2020, purchase originations are expected to grow 8.5% to a new record of $1.54 trillion in 2021.
Figure 1- MBA forecast for mortgage originators Image: https://www.mba.org/2020-press-releases/october/mba-forecast-purchase-originations-to-increase-85-to-record-154-trillion-in-2021
Mortgage loan origination is a process in which a borrower applies for a loan. The Loan Origination process includes pre-approval, loan application, loan processing, underwriting, credit decision, risk analysis, loan funding, and closing.Each of these aspects of the origination process needs to be automated for lenders to work efficiently. Specialized Mortgage Loan Origination System (Mortgage LOS) software is required to work on the data analytics of mortgage origination information. A good quality Mortgage LOSworks on Mortgage Process Automation through emerging technologies like AI and ML.
Mortgage LOS is a comprehensive software platform that is important for mortgage process automation. It facilitates the mortgage transaction from origination to post-closing. Lenders or mortgage companies use LOS to check the creditworthiness of borrowers.
What is a Mortgage Loan Origination System (Mortgage LOS)?
Mortgage LOS helps lenders to submit, retrieve data, and process information effectively. It meets the needs of financial institutions to get reports and validate personal information. The LOS process is composed of the following stages
Figure 2 - Loan Origination System Workflow
A Loan Origination Software should ideally have security features, updated regularly, entire process automation, integration with relevant databases, priceworthy, and trial-tested. Businesses that are on the verge of shifting from an older Loan Origination System need to consider the above factors while choosing a good LOS. inflooens has the best Mortgage LOS. Its Loan Origination feature of loan process automation is for accurate and superfast outcomes.
Key features of a Loan Origination System
A Mortgage LOS supports end-to-end loan processing from lead generation to closing. The key features of the LOS that take care of the loan process are:
1. Loan Origination Systemand POS (Point of Sale) CapabilitiesLoan origination system capabilities include automation that can process loan applications, facilitate risk assessment, and underwriting functions. This automation can ensure compliance with federal regulations. Point of sale (POS) mortgage system is a cloud-based solution that allows customers, loan officers, and brokers tomanage leads, compare products, and process application-related information and initial/finalrate lock. It helps to streamline communication between lenders, borrowers, and other mortgage stakeholders. Adopting a POS in a mortgage loan origination system can help in increasing the number of loans closed and positively affect revenues.
Figure 3 - POS and LOS Interoperability Image source - https://www.celent.com/insights/294309518
2. CRM FunctionalityHaving a customer relationship management (CRM) functionality in Mortgage LOS helps mortgage lenders ready to access their client information.It enables lenders to keep detailed client data, communication, and loan information. The CRM keeps track of loans as they go through the Mortgage LOS. It helps in saving time and brings out more efficiency in the entire process. inflooens is the best Mortgage CRM available in the market.
3. Document ManagementPaperless storage of borrower’s loan documents is one of thechief features of Mortgage LOS. By tracking missing and any due documents lenders can streamline the documentation process. It helps in accurately and efficiently prepare mortgage loan documents.
4. Mortgage Pricing and EligibilityMortgage LOS determines the eligibility of a loan at a particular price level. This information is available to mortgage lenders at their fingertips.
5. Compliance FeaturesTo support new regulatory requirements, a Mortgage LOS should be configurable to implement any changes. It should be able to monitor and generate proofs for audits. A Mortgage LOS should be able to search external sources for the borrower’s information as well for any supporting documentation. For more information on Mortgage Compliance, read our previous blog.
6. API for Data ExchangesLenders and servicers benefit a lot by using API (application programming interface). It brings in improved efficiency, data quality, compliance, and user experiences.It enables the user to connect easily to third party services. It is to help other applications and programs to manage corporate and local workflows.
7. Cloud deliveryImplementation of a cloud-based Mortgage LOS can be done in a short time across multiple locations. It gives increased convenience, continuous improvements, and greater consistency. By giving secure access in Mortgage LOS, approved users keep personal information from being stored on non-secured personal hard drives. /li>
Investing in a Mortgage Loan Origination System is a significant decision. An efficient, productive, and responsive Mortgage LOS is vital for mortgage lenders. A Mortgage LOS meets the requirements of regulatory exam standards compliance. A secure, cloud-based Mortgage Loan Origination System helps in implementing the loan origination process in a short time frame and keeps operational overheads in check.
inflooens is the world’s first “Loan Team Optimization Platform”. This next-generation, cloud-based, integrated mortgage platform aims to transform the entire Mortgage Process and enhance the customer experience. Learn more about the platform on www.inflooens.com