The Future of the Loan Origination System

One of the benefits of having reported on this space for so many years is that, over time, I have come to know who knows what they’re talking about and who just likes to hear themselves talk. Believe me, I’ve been accused of being in both camps in the past and most folks have a very difficult time figuring out who is in which. It gets even more difficult when the topic of conversation is highly technical or specialized. I find it rather like a game. It’s really not as easy as it seems, especially when you’re talking about the future of industry technologies. A lot of people working in the industry today know what the technologies of the past were all about. Some of them have a pretty good picture of what the tools of the future are likely to be. But many times these two camps don’t see eye to eye. It makes sense because the people who have invested heavily in creating new tools don’t want to admit they wasted those resources any more than the people who have invested heavily in legacy systems want to. It often takes an independent third party to figure out which path is right. An independent party like you, dear reader. In an upcoming Beyond Binary column in the print edition of HousingWire, I’ll give you the dubious benefit of my views on the future of one vitally important (at least for now) mortgage technology, the loan origination system (LOS). Being a reporter, i.e. a person who, by definition, isn’t supposed to know what the story is until he asks the questions, I could be quite wrong, and hope you’ll let my editor know if you think so. But if I am, it’s not because I didn’t ask enough questions. In fact, I asked a number of my old sources from across the industry and the responses are still coming in. Tim Anderson, president of SigniaDocs, was among the first to respond to my query about the future of the LOS. “The major market meltdown points to all of the sins perpetrated when you reduce the steps required to properly validate and verify information,” Anderson said. In the future, Anderson says the LOS will: –go from a manual people and paper validation process to a more automated and electronic verification process to trusted databases. –build in the investors’ underwriting process and requirements right at the time of qualifying a borrower, then automatically key up the automated steps to process against them. –integrate eSign capability Once the borrower’s information is validated, the future LOS will feature an Electronic Doc Management (EDM) paperless processing system to support the tracking and versioning of documents and the entire loan file throughout the process. Anderson is often the first up to the podium when an opportunity presents itself, but he also consistently adds value to the conversation. Do I agree with him? You’ll have to get the print edition to find out. I’ll be sharing views from other parts of the industry in the space in the weeks ahead. Rick Grant is veteran journalist covering mortgage technology and the financial industry. Follow him on Twitter: @NYRickGrant