How to Select a LOS
All mortgage lenders need a loan origination system (LOS) that aligns with the lender's operating structure.
Technology is always improving. What we knew about a system a year ago is likely obsolete. Every LOS selection decision must be based on current data.
A LOS demo is rarely representative of the full capability of a LOS. Of course, the demo looks great, but a demo alone is not enough data to support a LOS selection decision. The key is to create a fully developed user requirements analysis to identify the gaps between your specific requirements and the LOS options. This means you must understand what you need and understand the capability of each system. This is a lot of work, but is the only way to fully understand the system dynamics.
A LOS is an essential tool to help keep a Mortgage Lender out of trouble by flagging potential mistakes when the LOS is properly configured.
It is essential to identify your future self when selecting a LOS.
If you are going to be a correspondent mortgage banker with UW, closing/funding, shipping inside your company, the LOS choice is likely different than if you are going to be a broker / non-del mini-corr without UW, closing, funding, and shipping.
Lenders that are hedging / securitizing /servicing select a LOS to address the complexity of their activity.
Lenders that are correspondent sellers to aggregators may use the same LOS options as the larger hedging lenders.
Broker / mini-corr need a LOS that supports their simplified origination process that may be different from the LOS selection of a large lender.
A LOS selection is a 5-year decision.
It is essential to create a strategic plan to identify your future self to answer the question: Who will you be in five years? It is usually best to get the system today that has the capability to support you in the future, to avoid the cost, pain, and disruption of changing the LOS in the near future.
When selecting a LOS, it is best not to guess what to do.
It is also important not to underestimate the complexity of the LOS conversion effort. When a full system gap assessment is not available, hearing the actual experience of several active users can help to provide feedback, but even then, ask about specific details to understand the user's experience. If someone says, the system sucks, it is important to know why and how it sucks. Document the details and then use the preponderance of the data to help make an informed LOS selection decision.
Additional factors to consider include adaptability and philosophical alignment. The rapid pace of change within IT means the LOS firm must have a deep development team and a platform that supports adjustment. The philosophy of management impacts the LOS firm's commitment to customer support and product development. These issues are considered when MBS helps larger firms select a LOS.
Dr. Schell and his team at MBS offer services in the following areas:
Technology Services – MBS’ CIO, Theresa Marie is able to support your IT infrastructure needs including a LOS selection, configuration, and installation.
Growth Strategy – Dr. Schell, CMB can help you plan and execute a mortgage lending growth strategy.
Executive coaching - Leadership is a learned skill. Dr. Schell can teach you to be an amazing leader, an effective manager, and an inspiring coach that can foster a vibrant culture.
Accounting Services – Dr. Andy Schell, CPA, leads the accounting services team to become your outsourced accounting department.
Dr. Andy Schell, DBA (Ph.D.), MSML, MBA, CPA/CFF, CMB
Dr. Schell is CEO, Managing Partner, and Co-Founder of Mortgage Banking Solutions and MBS Financial Services ("MBS"), based in Austin, Texas. Dr. Schell is known for his ability to turn "vision into reality" and "chaos into order" as he finds creative solutions to the challenges his clients face addressing Revenue Stability, Technology Enhancement, Financial Management, and Workflow Efficiency.
He has 4 decades of experience as a strategist directing the activity of both small and large groups of employees including mortgage lending activity at Bank of America. His leadership knowledge extends from his hands-on experience and his doctoral academic pursuits in communication, strategy, and finance.
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