Should I stay or should I go now?
In 2014, Open Mortgage had a decision to make. They had been using an LOS of their own design since 2003, but when TRID was announced, they knew it would require a deep investment in order to make their system compliant. As Chief Technology Officer at Open Mortgage, Jim Howard was given the unenviable task of deciding whether to continue their current course or change directions. "Are we going to spend a bunch of money to enhance our existing LOS," Jim said. "Or are we going to look at something else?"
Jim knew that the Achilles Heel of their proprietary system was the absence of an integration with Fannie Mae's automated underwriting system. But when he approached Fannie Mae, Jim was told the door was closed on any new integrations. "That basically shut down one-half of the decision making for us,” said Jim.
Open Mortgage embarked on a search for an off-the-shelf vendor that could effectively replace their existing LOS while also ensuring TRID compliance. Over the next several months, Jim and his team researched thirteen different LOS vendors and narrowed their selection down to two.
Jim knew that the Achilles Heel of their proprietary system was the absence of an integration with Fannie Mae's automated underwriting system.
Won't Get Fooled Again
The battle between the two final vendors, one of which was LendingQB, was evenly matched. Their senior management team was split down the middle. The difference came down to a sales pitch. "[The vendor] assured us that they would do whatever we wanted with the pricing engine for a very low cost. They also said they'll be able to turn around business rules within a very short time frame," Jim recalled. A decision was made and LendingQB not selected. At least, not yet.
Within a few weeks of the LOS implementation, problems started coming to the surface. The pricing engine that could "do whatever they wanted," fell short. "The amount of data that was coming over with the pricing engine was only 13 fields. That does not work for us," said Jim. "We started talking to their executive team and they eventually called us and admitted the engine was not ready for prime time."
Over a period of six months, more problems were uncovered and Jim began to suspect they had made a mistake. Business rules were still not implemented. The browser based implementation they wanted was not supported anymore. The project was moving at a snail's pace. “The speed at which things could get done, their responsiveness to our business changes wasn't there. The whole thing just started to unravel."
Jim and his team had the same Clash tune running through their heads again only this time, the TRID deadline was approaching fast and they were no further along than when they had started the whole process back in 2014. There wasn't enough time to start from scratch. Do they try to push through the implementation? Or do they exercise what Jim described as a "terrible backup plan" that involved integrating their existing system with another vendor? "It would give me nightmares if we did that."
Then in June 2015, something extraordinary happened.
Under pressure from Congress and multiple industry trade groups, the CFPB announced an extension of TRID that pushed the effective date out two months. Jim took immediate action. "We said forget it. We're cutting the cord, cutting our losses. We're going to take our lumps and we called up LendingQB."