Integration is the Holy Grail of mortgage lenders, but are we there yet?Joe Kentintegration, eliminating re-keying, increasing accuracy
In Dan Brown's blockbuster novel, The Da Vinci Code, it
is the Holy Grail that's always out of reach. For lenders,
integration has taken on the same mythic proportions. For years,
integration has been forecasted, trumpeted and yet always right
around the corner. Well, I have good news: it's really here.
Integration means that all steps involved in the processing of a
mortgage work together. When information is initially entered into
the system, there's no more re-keying for things like title,
credit, flood, even closing documents. For a vendor such as my
company, Integrated Loan
Services, integration means that once we get the information into
our system, we are able to send it out to our field affiliates who
do the work. Then, they send it back to us in a data stream, it
populates our system, and we send it to the lender, where it
populates their system. Not so long ago, when integration was
touted but not a reality, loan processing meant you'd re-key all
day long. Lenders would send out an order via fax. We'd get it, do
the work and fax the report back to the lender, where processors
would re-key the information into their system.
Lenders who've embraced integration and left re-keying behind
are experiencing increased speed, accuracy and cost controls. It
means they can operate in the most economically efficient manner
possible, including eliminating the processes and staff time that
was spent re-keying.
This doesn't mean that all lenders have jumped on the
integration bandwagon. Some have never put a high priority on
integration. Often, it's because they are held hostage by outdated
systems that have not adopted integration as a necessity.
And then there are the myths that continue to float out there,
keeping lenders from even considering integration for their
systems. Here are a few of them and the realities that address
Myth Number 1: Integration is too
Reality: The savings are far greater than the expense. Up-front
costs have come down in response to market demand and changes in
technology. Also, making the transition less costly is the fact
that industry data standardization has made the process less
complicated (hence less expensive), a fact that has been aided by
the advent of business-to-business e-commerce.
Myth Number 2: It's only for the big
Reality: Smaller banks need just as much integration, if not more
than, as their larger counterparts because of the ultimate savings,
efficiencies and added ability to expand their territories. Here is
a concept that actually helps them compete on a level playing field
with larger institutions. There are even systems especially for
smaller lenders. For example, the program Real EC has a
browser-based system that allows small lenders access to multiple
Myth Number 3: It's not secure.
Reality: Today's technology goes a long way to address the concerns
of privacy in this arena. It uses secure connections, so the system
is not completely open. Also, it's important to remember that most
of the data that flows through these systems is public information
that's readily available over the Internet.
Myth Number 4: It's new and not really working
Reality: We've been involved with complete system-to-system
integration for four years and, with one of our larger customers,
we've been doing it for more than five years. All of the top 50
banks have connections to one portal or another, and we're finding
that this is now trickling down to mid-sized and small lenders.
Almost daily, we get requests from all over the country for
information about setting up integrated systems. We're also finding
that the increasing number of consolidations is bringing the need
for more integration because they result in more and more
transactions. Here's the reality: The big fish have technology, and
they will eat the smaller banks that don't.
Myth Number 5: I need a lot of technology people on
staff to make it work.
Reality: On the contrary, for most institutions, integration often
means they will need fewer techies. When done correctly, the
transition is relatively seamless. Lenders may hire consultants to
work with them during the configuration set-up and then, once it's
up and running, their normal IT staff will be able to handle
This boils down to the fact that integration is no longer
something that's on the horizon. It's in your own backyard. In
order to take advantage of these opportunities, lenders have to
work with the right technology partnerone that's dedicated to
helping them make the most of the latest technology and systems. If
lenders are with the right partners, these vendors will ensure that
integration will work for them. That's not in the future. That's
Joe Kent is senior vice president of technology with
Integrated Loan Services. He may be reached at (800) 842-8423 or
e-mail [email protected]