High-Tech Secrets to Get Home Loans
NEW YORK ( MainStreet)The U.S. housing market is back, not with a bang but with slow measured steps of progress. Five million homes are projected to be sold in 2013, home prices are estimated to increase by 13%, and the average credit score needed to buy a home is down to 720 from the highs of 770-odd during the worst of the sub-prime crisis.
While this is obviously good news for home loan firms, there is a bunch of specialized IT vendors who are smiling as well. These companies make the Loan Origination Systems (LOS) that determine the extent to which the mortgage firms can speedily and effectively service home loan customers.
Any company that wants to be regarded as a serious player in the mortgage industry must have a top-of-the line LOS supporting its business. Avista, ASC, Ellie Mae , Fiserv, Blueberry Systems , and Cognizant are just a few of the 50-odd recognized players in this field.
However, leading the technology charge are mortgage companies like Quicken Loans, the third largest home loan lender, the largest online lender and winner of the JD Power customer satisfaction award in the U.S. for three years running. So advanced is their proprietary LOS solution that they recently licensed it to another player in the mortgage business JP Morgan Chase .
Quicken Loans claims that against the industry average of 60 to 90 days to close a loan deal, their proprietary platform allows them to close in just 30 days. No wonder they closed $70 billion in loans in 2012.
The importance of technology to Quicken Loans can be seen from Computerworld magazine ranking the company in the Top 5 in its 2012 survey of 100 Best Places to Work in IT.
Money Saved, Money Earned
Smaller, mid-tier mortgage companies like Cole Taylor Mortgage have invested in best-in-class LOS as well. Research done by its vendor Blueberry Systems who deployed the company's RELAY solution at the mortgage, shows savings of up to $287 per loan deal.
An LOS implementation can cost anywhere from $2 million to $60 million based on scale, complexity and access from platforms like mobile devices. Therefore, ROI for such technology investments is a key selling point.
Network Capital Funding, an Irvine, Calif.-based mortgage broker employs home loan specialists with an average of eight years of experience in financing homes. The rest of the pitch to its customers revolves around focusing on technology as providing simple but important conveniences.
These range from the ability to sign loan documents electronically from home to helping a customer find the best loan online all made possible through a mix of technologies from Cisco, Redhat, Microsoft and Oracle.