To stay in business you need to be aware of technological advancements relevant to your business. New technology can vastly affect your business and adapting to the right new technology for your business is vitally important. The Loan Origination System is one such technological advancement that the lenders needs to be aware of. Let’s touch base about the Loan Origination System (LOS) at first before we get into the essentials features of LOS.
Loan Origination System
- A loan origination system automates and manages the lending process to address common challenges.
- It is defined as a system that automates and manages the end-to-end steps in the loan process – from the application, through underwriting, approval, documentation, pricing, funding, and administration.
- LOS include document management, pricing and eligibility engines, and compliance tools to decrease risk and increase loan manufacturing quality.
A LOS is a software system designed to perform the following functions:
- Manage loan origination and Completion processes.
- Manage pricing and eligibility for each loan.
- Manage the required documents for underwriting and closing.
- Interface with third-party systems for data/document exchange.
- Interface with compliance vendors to ensure compliance.
Essential features that you should look for in an LOS include:
- Pre-built compliance rules: The best solutions incorporate essential compliance rules into the software, which reduces the worry that your team will miss some basic yet important federal guideline.
- Customizable compliance rules: You should be able to set, adjust, and update your own rules and warnings, which decreases the potential for errors and reduces time spent on quality control and data correction.
- Third-party hosting options: For compliance needs outside of the software, the best providers work with fraud and compliance vendors that are SAS 70 Type II-compliant and allow you to use their solutions without ever leaving the LOS.
- Full audit trails: Users should be able to view changes to every file and track what was done, when, by whom, and why. Good audit trails also record when files were printed, emailed, or attached.
- Ease of use: Any quality loan software should save users time; this becomes especially important with compliance tasks that would otherwise be time-consuming to complete with a less functional LOS.
- Centralized reporting: Even when files and applications are accessed at multiple branches, centralized reporting keeps everything in order.
- Strong security: Access rights should be easily granted, moved, or revoked, and other security features must keep borrower data safe.
- Provider with industry expertise: Having a provider with long-standing expertise can help your institution grow and adapt as the industry evolves.
Each businesses have unique workflows and rules according to their own business needs. It is important to determine specific customization or configuration needs and research whether a LOS is capable of handling them before making a purchase decision.
Also, refer our article “LOAN MANAGEMENT SOFTWARE TO AUTOMATE YOUR LENDING PROCESS”.
The most commonly used Loan Origination System is “Encompass 360”.
Looking for more information on integrating with Encompass 360 or need help in integrating with right LOS, leave us a message.
Take Five Consulting is a technology company, based in Virginia U.S., that specializes in the Mortgage Banking vertical especially LOS implementation and application development. Take Five Consulting creates and implement mortgage technology and software specifically for Mortgage Industry.