iServe Residential Lending, a retail mortgage banker based in San Diego, Calif., has announced the implementation of the PriceMyLoan (PML) automated underwriting and loan pricing system as a way to improve the quality of their underwriting—especially in regards to investor overlays.
“We were looking for a way to scale our underwriting capabilities without increasing our risk,” said William Stock, director of capital markets at iServe Residential Lending. “PriceMyLoan was the only system that understood the importance of investor overlays and how it affects everything we do as a lender.”
PriceMyLoan is known for its accuracy and ability to determine whether a loan meets specific investor overlays and guidelines—in addition to generating a fully adjusted price.
PriceMyLoan’s ability to read live credit report data is what enables it to be more accurate at determining loan eligibility, a key distinction that separates it from other types of systems known as product and pricing engines (PPE). For iServe, this means that their originators will be able to obtain a comprehensive decision on both borrower eligibility and pricing right at the point of sale, before a rate has been locked and before it has been submitted for underwriting.
“Other systems rely heavily on Fannie Mae or Freddie Mac automated underwriting for loan eligibility,” said Stock. “This can lead to broken locks and lower pull through if investor overlays are missed after the fact. PriceMyLoan is unique because it combines a Fannie, Freddie or FHA decision with a comprehensive analysis of investor overlays and guidelines. We’re more confident that loans will be approved by investors, and we won’t have to waste time or resources re-underwriting loans.”
PriceMyLoan builds and maintains all investor overlays on behalf of their clients. “We’re plugged in with investors to know when changes occur,” said Gigi Campbell, national sales director for PriceMyLoan. “We’ve seen one investor make 20 changes to their products in a single month. If you’re delivering to four or five different investors, that’s up to 100 changes you need to track. PriceMyLoan automates all of this and drives down the risk of poorly underwritten loans.”
By raising pull-through rates, PriceMyLoan positions iServe to garner better pricing with investors. And with a smaller but higher quality pipeline of loans, turn times are reduced and underwriters are less prone to mistakes. For a lender like iServe that is focused on expansion and growth, better pricing and lower turn times are exactly what attract branches and top producers.