Purchase market-perfect: with new tools and a new technology development strategy, one company is helping lenders prepare for a resurging home purchase market.

Author:Lutz, Warren
Position:TECHNOLOGY - Company overview
 
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There was a time when mortgage technology meant using a fax machine to send out rate sheets. Then there was a time when it meant using a personal computer. Then it meant using the Internet. Next came automated underwriting and online mortgage applications. [paragraph] Somewhere, right now, it's almost certain that someone is doing something that will redefine what mortgage technology means for future generations. [paragraph] Two dozen or so software developers in Appleton, Wisconsin, seem well on track, having spent the past year building things that lenders currently don't have--things like automated historical lock-change management and mortgage insurance (MI) pricing tools. [paragraph] What's unique about these people and their company--LoanSifter Inc., a provider of loan products and pricing tools--isn't just what they are doing. It's how and why they are doing it. [paragraph] "One of the things that sets us apart is we're not just a technology company," says Mark Coupland, LoanSifter's vice president of business development. "We're technology people."

Building the culture

To get a handle on how LoanSifter builds software requires a short lesson in software development methods. Don't worry--we'll try to make this as painless as possible.

Not too long ago, most software companies created products in a very sequential way. Like a typical manufacturing process, it was one step at a time, from conception, design, writing code, testing and the final release.

This is known as a "waterfall" model, because progress flows downward, top to bottom, until a project is finished. With this method, it could take as long as a year or two before a product was brought to market.

When LoanSifter was founded in 2006, that's how the LoanSifter product and pricing engine was built. At that time, the company had three developers. Jason Miller was one of them.

"The waterfall method was very successful," says Miller, who is Loan-Sifter's vice president of information technology (IT). "But there were definitely a lot of bumps along the road. In the past, we had a lot of ideas but we didn't have a lot of background, and requirements would modify as we progressed down the waterfall. We knew the end goal, but how and when we got there was often unexpected."

Today, however, a growing number of software companies have left waterfall methods behind in favor of two newer methods: "agile" and "scrum." Rather than going from point A to point Z, each project is broken down into "sprints," with different teams working on project sprints concurrently. This generally allows companies to pursue several projects at the same time while affording greater flexibility to make adjustments along the way.

LoanSifter President Bruce Backer says the process is particularly powerful because the company can break projects into pieces, and release those pieces into the marketplace as they become available.

"We can get feedback from customers and then make changes and improvements," he explains. "It basically allows you to be much more responsive to the market, and your team likes it because they can immediately see the results of their work."

LoanSifter began making a full shift toward agile scrum when Rob Withers, the company's vice president of product development, joined in 2010. "I was a believer in agile development and a champion to move to the method in early 2011 while building out support for our loan officer compensation management tool," says Withers. "Our experiment with agile scrum allowed us to execute in an incredibly efficient and...

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