A bridge over troubled waters: integrated "smart" point-of-sale origination technology is a solution whose time has come. The branch, the call center and the Web site may never be the same.

Author:Happ, Scott

When you're weary, feeling small, When tears are in your eyes, I will dry them all. I'm on your side When times get rough And friends just can't be found, Like a bridge over troubled water I will lay me down. --PAUL SIMON, Bridge Over Troubled Water [C]1969, Paul Simon The year 1969 was marked by political upheaval-the Vietnam War, nationwide protests, college unrest. It was also a year of striking new technological advances-men landing on the moon, e-mail, the automated teller machine (ATM), the artificial heart, the Boeing 747 and the Concorde all debuted in 1969. Many pop-culture icons were also launched in 1969, including Sesame Street, The Brady Bunch and Wendy's[R] Old-Fashioned Hamburgers. And in New York City, singer/songwriter Paul Simon wrote one of the best-selling and most award-winning songs of all time: Bridge Over Troubled Water. Simon's plan was to craft a simple gospel-style song about comforting a friend. But when it was released on the Simon and Garfunkel album of the same name, Bridge Over Troubled Water skyrocketed lo the lop of the charts- becoming a multi-platinum hit that won six GRAMMY'[R] awards. In many ways, 2009 is a lot like 1969 -a time of uncertainty, crisis and change. And at many of today's banks and credit unions, many mortgage lenders are looking for a bridge over the troubled financial waters that are out there--a set of practical strategies they can use to compete, grow, reduce cost and stay profitable.


The challenge: Point-of-sale silos

Today's banks and credit unions are facing a serious challenge: how to increase mortgage volume, boost efficiency, improve service and reduce costs--and do it all despite being caught up in the most unsettled economic environment since the Great Depression.

One of the problems that too many lenders face--and the topic of this article--is a lack of efficiency, productivity and borrower convenience right at the beginning of the mortgage process, when the consumer is shopping and applying for a loan. Many lenders find themselves dealing with a cumbersome mishmash of point-of-sale (POS) automation solutions for providing mortgage quotes, taking applications, and pricing and approving loans.

Most lenders have a set of discrete POS silos: one for consumers to use over the Web and another for the call center (that is, if the call center even takes mortgage applications), as well as a completely separate tool set for professional loan officers. And the idea of using branch staff to take complete and accurate mortgage applications for most lenders is just that: an idea.

As a result, borrowers are often forced to deal with frustrating inefficiency as they plod through a time-consuming mortgage origination process that locks them into a single application channel.

Did you start your loan on the bank's Web site? Don't bother contacting the call center, then, if you have questions--call center staff typically won't even know you're working on a loan application, and they can't answer any application-related questions.

And what about lender impact? POS silos can contribute to poor productivity, borrower dissatisfaction, higher per loan costs, lower pull-through rates and--ultimately--reduced loan volume. So when interest rates fall and mortgage applicants stream into the branch, busy loan officers are forced to make borrowers wait. How long will customers sit around before they get up and take their business elsewhere?

Today about 70 percent of mortgage shoppers begin their search on the Internet, regardless of whether they apply online or in-person, according to The Silver Lining in Lending: Turning Doubters into Online Believers, a May 2008 report by Annette Tirabasso and Kimberly Spears, published by Deloitte Development LLC. In fact, writing in a Mortgage Banking article in August 2008, Tirabasso stated, "Most consumers who applied online have become online believers." But while the last 10 years have witnessed the emergence of the Web as a low-cost yet efficient way to reach "self-serve" borrowers, it is now time for the next big step forward.

That's because today's consumers expect the same application convenience via the Web, over the phone, in the branch or when they sit down with a loan officer. Regardless of the channel through which borrowers apply, lenders must be able to deliver the same convenience and efficiency that online borrowers routinely receive. But especially in today's uncertain economy, adding staff is a pricey path to better service.

Knowing this, we at Mortgagebot LLC recommend a new point-of-sale business model--a holistic, borrower-centric, enterprisewide approach that uses intelligent software solutions to unify and streamline the mortgage point of sale. Let's call it the integrated point-of-sale (IPOS) strategy.

Industry call to action: Integrate, streamline, accelerate

This new strategy calls for the tight integration of mortgage applications, pricing and approval throughout...

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