In Pursuit of a New LOS
Getting the total package – a strong vendor partnership and an innovative LOS – was critical for San Diego-based iServe Residential Lending. A few years ago, the team had become frustrated with their existing LOS. The lender struggled with an LOS that presented a myriad of challenges and consistently failed to deliver results when needed. With operations in 25 branches across the Western, Southeastern and Northeastern United States, iServe needed an LOS provider that would not only solve the challenges presented by the troubled LOS system, but also provide valuable insight to further their business goals.
The company, established in 2007, prides itself as a reputable source for providing financial strength and insight through experienced personnel and a passionate commitment to providing mortgage services. Due to its strong reputation and customer-centric approach, iServe quickly became a leader in FHA/VA lending. Their goal of making their customers’ financial goals become a reality both quickly and efficiently continued to drive the organization as it grew. Within five years, the lender’s reach grew from its foundation as a midsize Southern California lender to 18 states.
“Over the years, our reach has grown exponentially. Even as we grew, maintaining a hardworking, yet positive and forward thinking team remains as one of our top priorities. As a result, our turnover rate stays low and the camaraderie we’ve developed with communications is as strong as ever,” said Michael Wilson, Chief Operating Officer of iServe.
In 2012, the announcement came that iServe’s old LOS was being sunsetted. iServe leveraged the opportunity to find and implement a solution that could best fit the needs of their staff and customers. The lender shopped around to see what could best serve their needs.
“Many of the LOS vendors we considered were ok, but they did not have the features that would best fit our business need,” said Wilson. “Most were built to simply process loans, but not designed to do so in the most efficient manner for us or our customers.”
As they evaluated their options, the strength of an existing relationship proved key to their LOS search. As a long-time user of LendingQB’s PriceMyLoan loan pricing solution, iServe had developed a strong relationship with the LendingQB team. The iServe team found LendingQB to be a reliable partner in meeting their business goals, as well as a trusted advisor when it came to best practices and industry insight.
Because iServe executives knew that LendingQB had a proven track record of outstanding support, counsel and innovative solutions, it made business sense to migrate onto LendingQB’s LOS platform.“We found the pricing engine to deliver accurate and reliable results while we were still using our previous LOS,” said Wilson. “The support team was always available and the working dynamic proved to be beneficial on both ends. So when the time came to select and implement a new LOS, we were confident in our decision to select LendingQB.”
iServe’s selection of LendingQB not only focused on the technical features of the LOS, but also included the company’s culture. “We had worked with LendingQB for years with their pricing engine, and the people are fantastic,” Wilson said. “We knew that working with LendingQB meant that we would be able to work with them as a true partner. We wouldn’t just be a cog in a giant system that could be ignored.”
The company, established in 2007, prides itself as a reputable source for providing financial strength and insight through experienced personnel and a passionate commitment to providing mortgage services.
An LOS Built to Deliver Results
Once the decision was made to implement LendingQB’s LOS system, both teams worked to design the best configuration to fit iServe’s need. Given the extent of the existing relationship between the two, the implementation came with a greater degree of confidence and understanding on both ends. Additionally, the implementation was made easier because the pricing engine was already in place and configured. The LOS implementation only took 60 days, and the lender was up-and-running with little interruption.
“LendingQB’s LOS system is very intuitive. We are able to easily understand its features and processes,” said Wilson. ”The system has proven itself to be a reliable ally in an industry that is rapidly changing. We rarely encounter moments in which the LOS isn’t able to function at its maximum capacity. LendingQB also makes continual enhancements which keeps our process optimal.”
Through LendingQB’s philosophy of adoptimization, or working with the lender to best optimize their LOS and lending technology, iServe was able to refine their platform and third-party integrations to maximize its tools. “Adoptimization at its core works to combine workflow analysis, best practices and training,” said Tim Nguyen. “As a result of the adoptimization process, lenders are afforded structured methods to streamline their processes, ensure compliance, and continuously improve their lending practices.”
iServe’s reliance on the LendingQB LOS takes root in the proven ability of the LOS to produce results that enables the iServe team to make the best lean-lending decisions. As a pioneer in the SaaS LOS space, LendingQB relies on constant feedback from iServe to further push the limits of the LOS. With a strong vendor relationship, both iServe and LendingQB have developed a culture of trust. This trust in turn leads to an understanding of the business needs iServe seeks after.
In one instance, LendingQB was able to resolve an issue very quickly. iServe needed new fields in the LOS for reporting purposes. After a quick call to LendingQB, the vendor added the requested fields in just a couple of days.
“That doesn’t happen at other vendors,” Wilson said. “LendingQB is very nimble in meeting the challenges we face. They are always able to answer our queries and provide solid insight on how to address those challenges that in-turn help the way we do business.”
The trust, reliability and accountability between iServe and LendingQB attributes to the success of the partnership. LendingQB strives to ensure iServe has access to staff that is able to answer any question in a timely manner.
“We value the ability to contact LendingQB in a variety of ways. We reach them via phone and email, online chat and they continue to provide exceptional guidance in real-time,” said Wilson.
“LendingQB places a real emphasis on their customers. There are real people behind the company – people who are dedicated to our success. For us, this matters because we are not a big faceless organization, and neither is LendingQB. They listen to us and act on it.”
While integrating a new loan origination system (LOS) can be a lengthy process for mortgage lenders, with the guidance of a knowledgeable LOS vendor, this process is improved with the utilization of best practices that enhance business operations and profitability on the lender’s side.
Inlanta Mortgage recently tackled this very monumental task and the mortgage lender found upgrading to a new system improved their business. The Pewaukee, Wisconsin-based mortgage lender came to LendingQB after seeking a provider that would understand their needs and could improve their loan origination process without disrupting the experience of consumers.
Inlanta Mortgage recently tackled this very monumental task and the mortgage lender found upgrading to a new system improved their business.
Finding and implementing a new LOS
With 25 years in operation in 20 states, Inlanta knew their LOS system needed the capacity to meet the ever-growing demand on their business. As their former LOS system was being sunsetted, Inlanta used the opportunity to seek out a more streamlined platform that could process loans efficiently at a faster pace. During the evaluation process, the lender looked at six different providers and determined LendingQB best met its needs with its web-based, configurable solution.
While other LOS implementations typically take 18 to 24 months before they go live, Inlanta’s took less than a year. Inlanta began integrating the LendingQB platform in November 2015. Inlanta employees were trained on the new system starting in mid-February, 2016, and the complete pipe of loans rolled into the LendingQB system by June of 2016.
“The LendingQB implementation team we worked with was amazing,” said Chris Knowlton, Chief Information Officer of Inlanta. “The way LendingQB designed their LOS, there is a recommended path into the program so there’s not a lot of areas to go sideways. This resulted in a clean rollout with few issues. “
This success is due in part to the strategic relationship between the duo that fostered an environment of trust. Inlanta allowed LendingQB to provide best practices around the implementation, which left the process with little room for error and allowed Inlanta to streamline their workflow.
With LendingQB, Inlanta found itself in a new position, one that allowed it to be a proactive lender with the ability to expedite the origination process and monitor its loans at every step of the process, without dedicating large amounts of staffing resources to do so.
“Some companies don’t want to think of lending as a manufacturing process, but that’s how we envision the process,” Knowlton said. “Once we get the necessary data for the loan, it should go down an assembly line in an organized, systematic method. Our loans need to be closed within 30 days, and using a better processing system with the mindset of a manufacturing process enables us to efficiently process loans within that time span while creating a quality experience for the customer.”
As part of the relationship, LendingQB takes an active role in continuing to assist Inlanta with its LOS workflow.
“We use a continuous improvement process when it comes to manufacturing loans and LendingQB has continued to work with us on a regular basis well after implementation was complete,” said Knowlton. “Every two weeks, my team meets to discuss any issues or concerns with the system. We then pass those concerns to LendingQB who advises us on how to solve those problems and enhance processes. We appreciate how well LendingQB has taken care of us throughout this entire process.”
During the course of the first three months using the LendingQB LOS, Inlanta saw its loan volume reach extraordinary levels. This period set the record for the highest volume of a 3-month period in the lender’s history. What was remarkable to Knowlton and his staff was the ease with which they were able to support the record-setting volume. Immediately following the implementation of LendingQB, Knowlton noticed how much more at ease and calm his staff was, even though they were managing about 20 percent more volume with exactly the same personnel. Inlanta was able to move the business with much less stress and overtime.
“I fully expected that there would be a dip in volume when we migrated from our old LOS to LendingQB but the exact opposite happened. There was a surge in volume just as we went from implementation into production and we didn’t skip a beat,” said Knowlton. “The conversion to LendingQB allowed Inlanta to offer a better experience to our customers by closing loans much faster. I don’t know many companies that are able to rollout a new LOS and reduce average application to closing times. That’s a testament to the technology and the people at LendingQB. They made sure the system and all of our staff were fully prepared to use their LOS.”
With LendingQB, Inlanta is targeting 55-60% of a month’s workload is complete by the 15th of each month. With the majority of the loan processing completed in the beginning of the month, new business can be initiated by the middle of the month. The LOS provides a platform that improves efficiency, speeds and overall business practices.
“LendingQB’s system removes any hidden information, meaning we know where everything is at any point in time,” said Knowlton. “Every day we have a clear view of where each loan is, and it provides powerful insight. Everyone and everything is on one platform, which enhances every step of the loan origination process. We continue to see the benefits of the new LOS each day.”
As Inlanta continues to see positive results, they are thankful for the working relationship maintained with LendingQB.
Even as LendingQB’s primary responsibly is to ensure the operational stability of the LOS, Inlanta credits the team with going above and beyond by looking out in the best interest of their needs. When a lender and third-party vendor as able to maintain a trust and appreciation such as this, the result is a sustainable level of growth in which both parties benefit.
Broken Promises Almost Derail TRID Implementation
Located sixty miles due east of Los Angeles, Mountain West Financial is one of the largest mortgage lenders in the Western United States. Founded in 1990 by Mike Douglas and Gary Martell, Jr., the company has a reputation as a friendly, family-owned business with a ‘Make It Happen!’ philosophy.
Michael Stalnaker, Vice President of Business Process Management, joined the Mountain West family after two decades of corporate banking and immediately noticed the difference. “There’s just a lot of trust here. This was a home grown, small service-orientated lender,” said Stalnaker.
Due to the strong relationships that they built with their customers, Mountain West Financial emerged from the financial crisis in a better position than most mortgage lenders. The company grew from 250 employees to almost 500 within a few short years and became a major force in both wholesale and retail lending throughout San Bernardino, Riverside and Los Angeles counties as well as the Greater Sacramento area in Northern California.
In 2014, Mountain West Financial found out that their LOS system was being sunsetted. To make matters worse, the CFPB announced that TRID would be implemented by mid-2015. “We realized that even if our old system wasn’t being sunsetted, it was not TRID ready and wasn’t going to be,” said Stalnaker.
Mountain West formed a vetting committee and evaluated several LOS vendor systems. Having a strong background in technology, Mountain West was confident they had the expertise to find a vendor that could meet their needs within the required TRID time frame. They initially selected a large, highly configurable LOS system that they felt provided the flexibility they sought. “We wanted to be able to tweak everything to fit the way we saw the world.” Unfortunately, as is the case with many other LOS implementations, the vendor over-promised and under-delivered.
“We didn’t get past configuration,” said Stalnaker. “Our project manager was changed three times. Milestones, even through configuration, were never met. They came back and gave us — after almost nine months — our first statement of work. The estimated completion dates were not going to make TRID. And let me tell you, there were far too many zeros in that statement.”
Michael Stalnaker, Vice President of Business Process Management, joined the Mountain West family after two decades of corporate banking and immediately noticed the difference.
LendingQB Provides the Foundation for a Successful Implementation
Shortly thereafter, Mountain West began discussions with LendingQB to replace their failed implementation. Stalnaker remembered how their presentation caught his eye. “We were sold on LendingQB’s Lean Lending concept. I come from a Six Sigma background. When you mention lean to me you get my attention.”
Stalnaker was referring to LendingQB’s Lean Lending solution approach, a holistic strategy to achieving performance improvement that drives both the development of their technology and the services that accompany it. Lean Lending borrows heavily from lean manufacturing principles that originated in the 1980’s. LendingQB adopted these principles to apply to the mortgage lending industry with the goal of reducing the cost to ‘manufacture’ a mortgage note.
Stalnaker understands that the mortgage industry, Mountain West in particular, does not necessarily subscribe to the notion of mortgage lending as a manufacturing process. “This is a relationship, services driven business,” he said. “It’s a foreign concept to those in this industry that have been here a long time. But make no mistake, it has some elements of manufacturing in it. The repetition that people do in mortgage are not unlike the people that sit in front of a punch press. There’s still a conveyor belt here, you just don’t see it.”
LendingQB did more than show Mountain West the technical capabilities of their LOS system. They laid out exactly how the system was intended to be used and presented configuration options in the context of a workflow. “Our process, our workflow — it’s not on a piece of paper. It’s not something that we could easily draw. LendingQB did just that. They showed us a workflow that is concise, predictable and lean. It was impressive.”
Mountain West was convinced that LendingQB had the technology and a strategy for improving their business. They began implementation in early 2015 and, given their previous experience, were cautious about the project. “We had that ‘once bitten, twice shy’ attitude.” Mountain West dedicated two people full time to manage the project, with three other support personnel to assist with the implementation.
“It was a completely different experience from our other vendor,” Stalnaker remarked. “It wasn’t that we met more often or that LendingQB had a better project plan. They simply were more accountable. When LendingQB said they were going to do something, they did it.”
With TRID looming, Mountain West and LendingQB worked furiously to complete implementation, configuration and training. Stalnaker proudly acclaimed that, “We might have gone down as the quickest implementation when compared to our size. We completed forty-three branches in three months.”
He admitted that it wasn’t easy and their executive staff had to deal with quite a bit of adversity, which is typical with an LOS change. But in the end, “We didn’t lose anybody. Not a single person resigned or refused to use the system. That’s all the way through the organization, loan officers and branches – even those that threatened they were going to leave.”
Mountain West successfully implemented LendingQB and was able to meet the TRID deadline. After almost two years since their LOS journey began, Stalnaker is satisfied with their choice but more importantly, sees where his company is going in the future. “When you start peeling back how to make the Lean Lending workflow work, you drive the workflow. You trust the system,” he said.
“You have to remember that this is a home grown service orientated company that views the business from a service oriented, customized approach.”
Implementing LendingQB and their Lean Lending approach enabled Mountain West to establish a more consistent process that is scalable, which Stalnaker knows is a hallmark of being lean. “Consistency is the requirement of efficiency. As much as we changed our technology to fit our business, we needed to make the cultural changes that allowed us to adopt new processes necessary for our growth.”
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.”
Within one week, Jim had ironed out all the contract details with LendingQB and was sitting in a conference call with them to kick off the implementation. The difference from their previous vendor was like night and day. “It was an incredible experience from the beginning,” he recalled.
“On that first deployment call, LendingQB had it all mapped out. They asked us how fast we wanted to do the implementation and we said we’re going to do this in sixty days. The response from them was, ‘You’re crazy. But if you want to do it in sixty days, here’s what you have to do.’” Jim continued: “Within the first thirty minutes of the call, we already had a plan, what we needed to do, what our milestones were and the goals. LendingQB told us they would be able to go as fast as we can go.”
The first thing Jim noticed was the way the implementation project was managed. Their previous vendor provided them with one person who was responsible for managing the entre implementation project. Unfortunately, this person did not have the authority or expertise to affect any change themselves and ended up creating a communication bottleneck.
LendingQB took a much different approach. “Our implementation manager could do a majority of the work herself. She could even build a workflow rule on the fly during our weekly calls.” Jim explained. “But when there was something more specialized, such as pricing engine issues, I was able to have my secondary manager work directly with the team that managed the pricing engine. He could communicate his needs directly to them and I only had to monitor that process. I was able to delegate more tasks because the implementation teams were setup independently and we had access to them. We could have multiple things going at the same time.”
Another key to their lightning fast implementation was LendingQB’s Lean Lending best practice model. The Lean Lending model provides lenders with prescriptive workflows on every segment of the mortgage lending process from start to finish, designed specifically to maximize the functions of the LendingQB system. “We mapped out our workflow, compared it to LendingQB’s Lean Lending workflow and looked at what was different.”
Jim discovered that LendingQB’s Lean Lending model was not that different from their own process, but that LendingQB had the advantage of knowing how best to leverage the features in their system. “We asked ourselves, is this where we are going to make the system work for us, or are we going to change our practices to match the way the system is built? That simplified things because we had fewer customizations and rules to put in place.”
Using a core team of two senior executives (Jim and Greg Block, Senior Vice President of Lending), the implementation was coordinated across eight different departments. Jim and Greg met with LendingQB once a week and committed their efforts full time to the project, poring through every detail. The results surprised even Jim. “We had our first live loan in LendingQB exactly 50 days after our first meeting, 16 days ahead of TRID. We actually closed some pre-TRID loans in the system that we didn’t expect to do.”
Looking back on his journey, Jim is the first to admit that changing an LOS is a tricky and complicated process. There are many moving parts to consider, involving numerous departments and differing business interests. By selecting a vendor that had a detailed implementation plan, responsive support resources and relevant best practices, Open Mortgage was able to accomplish more in 50 days with LendingQB than in 50 weeks with another vendor.
“This experience has shown us that getting credible and meaningful support from your LOS vendor can make all the difference.”
Technology is obviously the reason we need an LOS, but bridging that gap between buying an LOS and being able to use it is what determines success or failure.