Bundling up with technology Patricia Jonesbundled services, Electronic Partner Networks, portals, value-added networks
For too long now, delivering on the promise of bundled services
has been a challenge. Bundled services involve coordinating
multiple products such as title, credit and appraisal and until
recently, there hasn't been an adequate delivery mechanism for
delivering all that information to lenders in a coordinated
fashion. Bundled services started as a good idea, which (strangely
enough) came from the federal government as a result of RESPA
reform initiatives. Although the reform was shelved, the idea of a
single guaranteed mortgage package containing all that's needed to
close a loan struck a chord with both lenders and consumers. Both
also found it appealing to know the closing costs upfront. The idea
gained traction.
It turns out that it was easier said than done. Closing a loan
involves multiple services using in-house and outside providers.
Until recently, there hasn't been a good mechanism to deliver the
entire bundle. Two approaches emerged, enabled by quickly evolving
technology: Electronic Partner Networks (EPNs) and portals.
EPNs (also called "valued-added networks") offer lenders access
to multiple service providers, allowing them to efficiently
coordinate ordering and product delivery functions. In short, EPNs
give lenders one place to order a bundle of services that are
delivered back through that same single channel. Technological
advances allow bundles to be more easily created, and settlement
services providers have responded by grouping their products
together into bundles for the lenders. The challenge to developing
such a network was creating a level of technical integration among
all of the providers so that lenders get seamless delivery of the
whole bundle.
Other providers choose to deploy a proprietary portal. Instead
of a partner network, these portals allow lenders to electronically
access the origination and closing services of a specific
provider.
Where will the technology take us in the future? I expect that
lenders will be able to create their own bundles for settlement
services in an automated fashion, rather than having to work with
pre-defined bundles. Think of them as dynamic bundles of services.
We're already seeing the beginning of this. I believe this is a
logical progression and I know that technology can support it, as
the industry moves toward fully electronic mortgages.
Today's technology means that vendors can deliver on the
promises of bundled services, which will save the lender money,
help lenders and borrowers know their costs upfront and simplify
the settlement process. If those three things aren't happening,
then you're missing the point of bundled services.
Patricia Jones is senior vice president and chief technology
officer for Fiserv Lending Solutions. She may be reached at (262)
879-5000.
