Joe Ludlow of Advantage Systems on the Science of Financial Data

Joe Ludlow is Vice President for Irvine, Calif.-based Advantage Systems, a provider of accounting and financial management tools for the mortgage industry. More information on the company can be found at   

MBA NEWSLINK: With an increase in activity, why should mortgage companies empower their employees (outside of the accounting department) with greater access to financial data?

Joe Ludlow

JOE LUDLOW, ADVANTAGE SYSTEMS: While the old saying, “rising tides raise all boats” certainly pertains to today’s market, the savvy mortgage manager leverages easy to use data through dashboards and drill downs to make better decisions. Ask yourself, “Is this loan officer profitable or just busy? How much did they generate in BPS per loan for my branch or for the company?”

With loan officers eager to land lucrative compensation packages, let’s make sure we are realistic about what it costs for this loan officer to do a loan. Accounting has always provided a dose of reality to a firm’s business development strategy, and today’s market is no exception. Being able to easily drill down to BPS per loan calculations, including the loan level expense data from accounting, makes it easy for mortgage managers to maximize their loan officers. 

NEWSLINK: In the past several months, companies have updated and adopted technology at a rapid pace. How does industry-specific technology impact a mortgage company’s processes, efficiency and overall bottom line?

LUDLOW: As a technology vendor, we are also seeing increased activity across the board, including interest stemming from new customers’ growth. They can’t continue to grow using outdated and inadequate systems and are upgrading to more scalable solutions. On the other hand, existing customers are adding additional features to gain further productivity from their employees. In all cases, it’s about automation. Quality accounting software automates the creation and reconciliation of transactions at the loan level, saves a salary in the accounting department, and creates an environment where loan volumes can increase without creating the need for additional staff. 

Most of our clients are interested in automating the basic process of paying bills. Using ACH, printing automatic signatures on lower dollar checks and the ability to print checks to blank check stock has reduced the need to go to the office for the check run. Coupled with online AP approval systems that offer loan level detail and document imaging within the process, we can reduce the need to do AP at the office to almost zero. It’s easily demonstrated that managers can have full control over the cash going out without having to physically be there, which is critical in today’s environment.   

NEWSLINK: How can financial management and reporting tools help the accounting department at a mortgage company automate some of its manual processes and create more detailed, engaging reports?

LUDLOW: Accounting in the mortgage industry includes the unique challenge of getting it right for each loan. Your loans must tie out to cash and each loan must reconcile to zero. Each loan has a large number of accounting line items – from the loan amount and the origination fee to the appraisal fee, doc prep fee, flood cert fee and much more.

More importantly, this granular information should be available to branch managers and executives in real time. It all becomes reconciled basis points per loan. The database settings should have the ability to filter data so that managers see only what they are entitled to see. Still, it’s the software provider’s challenge to deliver reporting and data in ways that engage non-financial managers. After all, it’s key for front-line managers to have a clear understanding of the profitability of their loans!

Graphs should be easy to use with minimal-to-no training required and drill-downs should provide a clear path to the loan detail that makes up these reports. An industry-specific accounting system should provide drill up, drill down and drill through capabilities that anyone can use and understand. 

NEWSLINK: Looking beyond the refi boom brought on by the pandemic, what should lenders have in place following this year’s increase in loan volumes and low rates?

LUDLOW: Refi booms give firms the budget to invest in great software. Accounting systems should be easy to implement – 60 to 90 days should be enough time to go live on a new accounting system. Therefore, firms can start using the new accounting software soon, to help maximize profits today. Additionally, mortgage companies are preparing for the end of the refi boom and will need to control costs carefully. It’s important to build in these automation technologies in accounting now to help the firm keep staffing low while building loan volume and profitability. Later, this effort becomes a huge asset when times are lean and costs need to be controlled.

NEWSLINK: What changes can the mortgage industry expect and how can the industry prepare as we head into Q4 and into 2021?

LUDLOW: As we all know, loan volumes cycle. Interest rates play the largest factor, but elections and changes in the overall economy play a large role in who can buy and home and who can refi their home. The best firms grow intelligently when times are good and have a plan to remain profitable in the lean times. When times are good, firms should invest in software that increases efficiency, is user-friendly and provides live reporting with intelligent drill downs. Do it now and you are done! It’s an asset you don’t have to pay for again when the lean times come, and we know they will eventually come. 

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at; or Michael Tucker, editorial manager, at