Matthew Wood: Today’s LOS must be designed with future technologies in mind

PERSON OF THE WEEK: The mortgage market is unfortunately on the verge of another downturn, but that means mortgage lenders have more time to focus on refining the technology and processes they use to improve their borrowers’ experience.

As lenders seek to improve their systems, they will no doubt ask themselves, “What are the latest developments in LOS technology? Very often, only LOS providers who are constantly innovating will have a meaningful answer to this question.

So what will the LOS of the future look like? And what innovative features could it sport? Discover, MortgageOrb recently interviewed Matthew Wood, Senior Director, Consumer Lending, for TAVANT.

Q: In your opinion, what makes an LOS stand out as truly innovative?

Wood: Investing in the right mortgage origination system is a vital and difficult decision for mortgage lenders. To be truly innovative, the core loan origination platform must incorporate the incremental gains of today’s digital and data journeys. To be truly impactful, the loan origination ecosystem, inside and outside the platform, must be designed to naturally open up to the presence and power of emerging crypto/transfer learning technologies. deep (DTL)/ blockchain/ artificial intelligence (AI)/ machine learning (ML) technologies.

The all-too-common measurement of a successful LOS is usually a question of whether it is suitable for handling larger production volumes. For many years, success was not necessarily measured by a significant efficiency gain per unit. Fortunately, this trend is reversing, but the overall success of a value creation platform, like an LOS, is deeper if it can drive traditional advantages like scale, combined with product reach, to new quality forms, improved conversion, etc.

To put it more directly, an innovative LOS is multifaceted and future-proof when it includes rapid deployment that seamlessly integrates with existing systems and workflows, versatile features that improve decision-making and day-to-day operations , and a future-proof design that evolves and grows alongside its organization.

Moreover, suppliers must also be innovators. A supplier who innovates is one who really listens to customer concerns. Customers often get valuable feedback on the issues they face today, sparking insightful ideas to improve systems and develop new products for vendors to act on. As the industry moves closer to realizing a true end-to-end, fully paperless electronic mortgage process, it will need the right LOS to help put it in place.

Q: When it comes to technology investments for lenders, what’s next? What does it mean to successfully pivot in a time when things are changing rapidly in the mortgage industry?

Wood: The pandemic has permanently changed the way consumers use technology. Those looking to buy or refinance a home are looking for lenders who offer the tools online to complement their home mortgages. Investors looking for opportunities to continue to improve the borrower experience in this rapidly changing landscape will need to understand the latest changes in the industry, what parts of the mortgage process can be further improved, and potential upcoming innovations.

The mortgage industry has continued to embrace technology to streamline the process of obtaining a mortgage, with the goal of making the consumer experience smoother and faster. Rather than just relying on a basic lending platform, combining multiple third-party technology components can be helpful.

Lenders will continue to spend on mortgage technology, and technology-driven innovation will seep further into core platforms and core technology. Given the industry-wide demand to deliver a superior customer experience and create long-term efficiencies, several innovative mortgage product offerings and technology solutions are expected to emerge.

Q: What can independent mortgage banks do to stay competitive and successful in 2023?

Wood: More efficient technology and an increase in new types of lenders are creating opportunities for investors. Software solutions such as front-end platform modernization, workflow management, document retrieval and management, third-party data verification, assessment management, electronic closes, automated compliance and decision-making are designed to speed up the mortgage application process, reduce costs for the lender and improve the overall customer experience. Failure to update legacy processes can prevent lenders from automating front-to-back processes.

To be competitive, independent mortgage banks may need to completely and permanently change the way they serve borrowers and invest heavily in digitized interfaces that make it easier to submit an application, upload documents, and communicate with the lender. Improving the customer experience should be a top priority. Lending should be made as simple as possible by giving consumers the tools they want and expect.

Q: If you could go back in time, what would you say to your pre-COVID self?

Wood: That the technological advances the industry has been talking about for decades and the promises of faster, more efficient processes will finally become reality.

I think most industry professionals will agree that the mortgage industry has traditionally been extremely slow to embrace change and even slower to embrace newer and more modern technological solutions. This mindset apparently changed overnight.

The pandemic has dramatically accelerated technical change and forced businesses to deliver tools and services in a virtual environment, automate processes, and leverage digital platforms to engage consumers.

It’s such an exciting time in the industry to finally see the promise of digital – improved workflows; faster and more accurate processing; reduced costs; and an improved overall customer experience – finally coming to fruition.

Norma A. Roth