Over the past two decades, the mortgage industry has gone through a massive shift from paper-intensive loan files to electronic documents and automated underwriting. Applying technology to business processes should bring about productivity gains and result in lower prices for consumers.
Yet those positive outcomes have been limited for lenders, for several reasons. Each Joan application is unique, and human intervention is necessary throughout the process. Lenders also must absorb new costs as compliance becomes more complex.
Today anxieties about staying compliant and handling investor repurchase demands are particularly common among correspondent lenders, says Rob Carpenter, vice president of technology for CoreLogic Dorado, Irvine, California.
Yet numerous retail lenders have discovered over the past few years that they can grow volume rapidly by setting up a correspondent lending arm. However, monitoring third-party originators (TP0s) both for compliance and loan quality--while also making a profit on the business--can be challenging for a new entrant to the field.
Current technology solutions don't ease their concerns, Carpenter adds. Most correspondent systems were developed by retail lenders who simply tweaked their existing loan origination system (LOS), he explains.
But retail and correspondent lending have basic differences that automation should address, according to Carpenter. A retail automation system must be concerned primarily with collecting information and documents to build a loan file. Correspondent systems, in contrast, focus on auditing and analyzing data that an originator already has assembled in an LOS.
Additionally, correspondent lenders are obsessed with providing great customer service, says Carpenter. Their originator clients want to price and lock loans quickly, and then manage loan conditions efficiently.
CoreLogic Dorado's focus in producing its new TPO Portal for correspondent lenders is on "the client's client," agrees Dino Lack, senior director of product management. Previously Lack served as vice president of wholesale lending support at Wells Fargo Home Mortgage, Des Moines, Iowa.
Nearly two years of development time were needed to produce TPO Portal, Lack adds. Six months went into market analysis, and the same amount of time was devoted to developing system requirements. Ten months were subsequently spent writing the software.
TPO Portal is designed for lenders with 300 to 1,000 correspondents, adds...