Choosing your new LOS is a significant decision for any new or experienced mortgage brokerage and there are a number of features that are needed to provide for maximum profitability for your business. A mortgage Loan Origination System (LOS) is a tech tool that can be incredibly useful for you and your team from application to post-closing.
An effective LOS software coordinates all the most essential steps that must be completed for new loans, as well as potential refinances. This includes the origination process, fulfillment management, loan pricing, eligibility requirements, and document management.
When looking for the right LOS any mortgage industry business should include a review of the processes and procedures that make up your lending operation and determine whether the vendor’s features meet your needs.
What is a loan origination system (LOS)?
A Loan Origination System (LOS) is a mortgage software platform that takes a mortgage transaction from origination to post-closing.
It is best to think of your LOS software as a sort of gatekeeper throughout the entire life cycle of a loan, opening the gates to the next step once it has all of the necessary information to proceed forward. The data can range from basic borrower contact information to confidential information, which must be stored safely and securely in order to ensure safety and trust.
Although every lender has its own unique loan fulfillment process, they usually follow the same principles and procedures due to regulatory protocols. With these methods, LOS software can provide mortgage lenders with individualized support systems for every loan’s origination and fulfillment based on each borrower’s unique needs.
What are the most important functions of a LOS?
The two most important functions of any Loan Origination System software are origination and fulfillment of a loan. Origination is initiated at the start of the loan process. This includes some aspects of the point of the sale process, management of the loan application, and pre-qualification protocols and procedures. Fulfillment takes the information gained during the origination phase and guides the borrower through the steps of the appraisal, underwriting, closing, funding, and post-closing.
Pre-Approval Process
The beginning of the loan process during the application phase includes the prospective borrower determining if their credit score and monetary savings will qualify them to purchase their potential home. Effective loan origination systems will take this data and transfer this into a pricing engine. Once the pricing engine process is finished, prospective homebuyers can decide between various lending programs they qualify for based on their unique financial portfolio.
Purchase Agreement
After the pre-approval process is complete and the buyer along with both parties apply their signatures onto a purchase agreement contract the LOS will next process an appraisal order for the property. Once the independent appraisal of the property is completed, a mortgage underwriter will process your loan by utilizing your credit reports, tax transcripts, and title searches.
Clear to Close
Once all documentation has been processed and ready to go, we now move to the clear to close stage that includes all the necessary documentation required for the borrower to sign important documents like closing disclosure forms. Strong LOS software offered through LendingPad will ensure all relevant information is included to ensure compliance with local regulatory requirements.
Many times during the lifecycle of a loan borrowers will find that key information or documentation goes missing, deadlines are missed and ultimately home purchase opportunities are squandered due to not equipping themselves with the proper tools. That’s why it is important to ensure that you employ yourself with LOS software from services like LendingPad and ARIVE whose embrace of modern technology and productivity-focused features provide consumers and brokers alike with an optimal level of support.
The Most Important Features of Your New LOS
Choosing the right Loan Origination System will go a long way in determining the reputational success of your mortgage business. The modern-day LOS a number of key features in order to shape your customers’ experience in a positive way through efficient mortgage processing, user security, and next-level client service.
1. Integration
There are a number of partners within the Brokers Are Better Network that offers valuable services to independent mortgage brokers. In a previous blog, we discussed the importance of refining your tech stack for seamless integration throughout the mortgage process.
When looking for your business’s LOS software, it is important to consider whether the vendor is compatible with your CRM software like Shape Software, documentation management system, and offers POS integration. If done correctly this will make the entire process of taking out a loan much easier for the broker and borrower alike.
2. Cloud-Based
Security regarding sensitive consumer financial information is a top priority for brokers and consumers in today’s highly competitive and digitized housing market. That is why vendors like LendingPad offer 100% cloud-based LOS software which minimizes the need for traditional storage responsibilities and ensures accountability in terms of safeguarding data in an accessible fashion.
Cloud-Based software is also put simply much easier to use for borrowers and brokers to use taking so much of the hassle out of the mortgage process. The simplified user interface will in the process enhance efficiency and productivity hopefully leading to higher productivity rates for independent mortgage brokers juggling a number of business opportunities in a busy market.
3. End-to-End Functionality
Many brokers are looking for nearly complete integration in their LOS system and that’s why LendingPad’s end-to-end solutions are perfect for a business looking to keep its vendor expenses low. An end-to-end solution software will provide all the necessary functions and resources required to substantially meet your business goals and will also give brokers peace of mind when it comes to the management of a number of key requirements central to the loan process from start to finish.
End-to-end LOS software like ARIVE also provides for a more automated process thanks to streamlined workflows that enhance data security across the life of a loan. This is in the process improves accuracy and efficiency leading to more happy customers and a steady stream of referral businesses in the process.
4. Scalability
The current housing industry is increasingly competitive with mortgage rates still at historic lows and a supply shortage that is proving difficult to meet consumer demand. That’s why scalability is key when looking for a LOS system that is prepared to meet the demands of a high volume application landscape which is to level up your mortgage business.
Brokers depend on reputation and word of mouth in order to obtain referrals and establish themselves as housing experts in their local communities. That’s why ARIVE has prioritized speed and accuracy as a vital component any modern-day LOS is required to possess in order to scale up both effectively and rapidly.
5. Customizable
No two brokers are the same and business needs not only can vary from state to state but also community to community which is why ARIVE has built a fully integrated broker environment that is capable of shifting with industry changes. The adaptability of the wholesale channel requires a LOS software system that is consistently updating with the latest technology which will allow your business to customize processes and procedures for your unique needs.
A strong end-to-end LOS solution will allow your business some levels of customization which will provide for a seamless mortgage application process.
Choose the LOS That’s Right for You
Many consumers and brokers find the loan origination process too difficult and far too drawn out which is why it is absolutely vital to choose the LOS that’s right for you and your mortgage business. Finding the right LOS that properly automates workflows and streamlines data in a timely manner can be a painstakingly difficult decision. Thankfully AIME has provided access to a number of vendors through its Brokers Are Better Network such as LendingPad and ARIVE which provide efficient solutions primed and ready to bring the wholesale channel to a whole new level of success.
Learn more about the Brokers Are Better Network