STRATMOR: Current Loan Origination Systems Score Low on Digital Mortgage Functional Preparedness
STRATMOR Group, Greenwood Village, Colo., reported “lackluster” satisfaction with loan origination systems–nothing new, said STRATMOR Senior Partner Garth Graham.
“But when considered in the light of the pressing demand for digital mortgage capabilities, the areas in which today’s originations systems fall short become even more glaring,” Graham said.
The company’s 2017 Technology Insights Survey analyzes two years of data to assess the readiness of the current loan origination system (LOS) landscape for the coming age of the Digital Mortgage. It reported most digital mortgage-specific functional capability lacking in current LOSs; must be achieved via add-on applications.
“When STRATMOR is consulting with clients–typically within the context of reengineering or establishing new origination platforms–we work toward implementing specific digital mortgage functional capabilities organized primarily around sales and fulfillment processes,” Graham said. “Very few can currently be found in a commercial, off-the-shelf LOS. Rather, they’re most often specialized applications that need to be hooked up to the system. Where they are currently available, satisfaction levels pale even behind those of LOSs in general.”
Graham noted to be fair, the effectiveness of any LOS depends on both the system’s functional capabilities and the skill with which the system is deployed. “Regardless of where the fault lies, LOS systems are not delivering what they could,” he said. “This only becomes more pronounced when one considers the functional capabilities necessary for the digital mortgage process.”
STRATMOR’s Mortgage Insights report also examined MortgageSAT borrower satisfaction data to help quantify the relationship between certain practices related to the mortgage closing and levels of borrower satisfaction.
MortgageSAT data show a 32-point satisfaction differential between borrowers contacted by their lender prior to closing and those who were not; and a 17-point difference for those whose closing did not start on time.
STRATMOR noted seemingly minor events, such as making contact with the borrower prior to closing, or having the closing begin on time as scheduled, can have a significant impact on borrower satisfaction. Among the majority of borrowers who are contacted prior to closing, for example, average satisfaction scores a 93 out of a possible 100. For the 8 percent of borrowers who are not contacted, satisfaction plunges to just 61, a 32-point differential. Likewise, for the 93 percent of borrowers whose closing starts on time satisfaction ranks a 92, as compared to a score of 76 for those whose closing started late.
The March edition of STRATMOR Insights can be accessed at http://www.stratmorgroup.com/wp-content/uploads/STRATMOR-Insights-March-2017.pdf.
