LOS is not a one-size-fits-all system.For smaller brokers and banks, a LOS may be one of the more significant purchases they make and should be thought through and planned out before any decisions are made. The process for finding the right LOS includes studying the business’s internal processes, researching different software systems, planning out key features, and entering into a relationship with a software vendor.
Studying Internal Processes
What are the steps a customer goes through during the sales process and the life-cycle of the loan? What information does underwriting need to make an informed decision? These questions and others like them form the core of the information a LOS will manage, and it is essential that any business map them out before they look for a LOS system.
- Customer Acquisition – What are the steps involved in gaining leads and converting them to customers?
- Loan Life-cycle – How is a loan managed over its lifetime? What is the process for managing the inventory after the loan is closed?
- Underwriting Process – How is credit assessed?
- Documents Management – What documents are necessary for closing a loan? What documents are necessary for reporting? Who needs to access these documents?
- Interfaces– What software is currently being used to manage different aspects of the business? Does that software need to be integrated intothe loan origination process?
Answering these questions is necessary in order to enter into the next step, researching LOS options on the market.
Researching Alternatives
There are many software vendors on the market. During this stage of preparing for purchasing a LOS, key decision-makers should be reading white papers, attending product demonstrations, and performing due diligence on LOS options and alternatives.
Key Features to Look For
When researching, there are several key features that any LOS or alternative needs to have in order to meet the needs of any mortgage lending institution. Some of the key functions have already been discussed in some detail.
- Loan origination andPOS capabilities
- CRM functionality
- Document management
- Pricing and eligibility
- Compliance features
- API for data exchanges
Some other key features that a business needs to consider when selecting a LOS to include:
- Cloud delivery – Secure access by approved users keeps PII from being stored on non-secured personal hard drives.
- Professional installation – Loan fulfillment is a core part of a business’s processes. There will be significant labor involved in setting any software system up for a specific business and the software vendor should have accounted for that with installation fees.
A key features list for the business should be written and agreed on by decision-makers while researching alternatives. Investing in a LOS is a significant decision and should not be entered lightly.
Increase Cost-Efficiency Of Lending Operations With Cloud Softwareand Loan origination software vendors
Request for Proposals, Discovery, and the LOS
Once research has been done, the moment comes to make a decision and begin implementing a LOS. For some institutions, there is an additional step involved in asking for RFPs from various vendors. Whether the business uses the RFP process or internal research and discovery, the previous research steps are essential. With an understanding of business processes and key software features, the selection of software simply follows the already defined parameters.
Read our post:
Paying for a Loan Origination Systemto find out what to expect to pay for a LOS.
