Mortgage Loan Origination Systems

The process from origination to fulfillment is complex. An LOS paired with a CRM is what you need to keep your pipeline on track.

Loan Origination Software

Along with your CRM, there are systems that you will need to ensure consistent growth year over year.  A mortgage Loan Origination System (LOS) is one such platform that can assist you and your team from application to post-closing.  

An LOS manages the essential steps that must be completed for new loans, as well as refinances.  This includes the origination, fulfillment, pricing and eligibility and document management.  

As a mortgage professional, the biggest challenge is managing your contacts throughout these steps, which is why Surefire CRM has made integrating with your LOS’ our top priority. 

This Article Covers:

  1. Understanding what an LOS can do
  2. Essential functions of an LOS
  3. Key features to look for when implementing an LOS 
  4. Systems you need to integrate with your LOS

What is a Loan Origination System (LOS)?

A loan origination system is a software platform that takes a mortgage transaction from origination to post-closing.  

It is best to think of your LOS as a lock system in a canal, opening the gates to the next phase once it has all of the necessary information to proceed.  The data can range from basic borrower contact information to confidential information, which must be stored securely.  

Although every lender has their own loan fulfillment process, they usually follow the same principles and procedures.  With these methods, an LOS can provide mortgage lenders with customizable support systems for the origination and fulfillment of every loan.

What are the essential functions of a loan origination system?

The two key functions of any LOS is origination and fulfillment of a loan.  Origination begins at the start of the loan process.  This includes some functionality for point of sale (POS), management of the loan application and pre-qualification.  Fulfillment takes the information gained during the origination phase and guides the borrower through the steps of the appraisal, underwriting, closing, funding and post-closing.

LOS - Loan Origination SystemThe start of any loan begins at the application stage.  First, the home buyer learns whether their current credit rating and savings qualify them to purchase their prospective home.  An LOS takes this information from the Point-of-Sale and pulls it into the Pricing Engine.  Once completed, the borrower can choose between different lending programs they qualify for concluding with their pre-approval letter.

Once pre-approval is given to the buyer and the purchase contract is signed by both parties, the LOS kicks into high gear processing the order for the appraisal.  With the independent estimate of the property’s value, the mortgage underwriter can process the loan with all necessary credit reports, title searches and tax transcripts.  Underwriting is driven by information which means that you’ll need a reactive CRM that can send out requests as quickly as possible.

Whenall of the documentation is prepared, the clear to close is given with all of the necessary documentation presented for the borrower to sign including the all important closing disclosure document.  Documentation is key during this stage and you LOS system needs to keep you compliant.

At any point in these stages, a piece of the dozens of documents can come up missing, data points may be missed or a deadline can be pushed back.  Without the proper support from your LOS, unexpected delays can reduce productivity and harm your ROI.

What are key features for implementing an LOS?

There are many software vendors available to mortgage professionals.  During your discovery phase prior to implementing an LOS, there are key factors that you’ll need to consider.  Some of these features we’ve already discussed, such as CRM compatibility, document management and POS integrations.

One of the other key features to consider will be compliance.  Your LOS system needs to follow federal and state laws, and this doesn’t just apply to data security regulations.  For example, your loan estimate and  closing disclosure need to match one another to remain compliant.

Which systems need to integrate with your LOS?

While LOS software provides origination and fulfillment management to help LOs manage their pipeline, these systems are not designed for external communications.

This is why the best mortgage CRM systems like Surefire work with LOS systems to manage your mortgage pipeline effectively.  With these systems working in tandem, your communications with internal team members, borrowers, agents and other third-party service providers will be optimized giving you and your team members the ability to close more loans.

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Who are the top mortgage LOS companies?

When considering the LOS you’ll use to optimize your lending team, it is important to consider the value that they bring to your current systems.  Below is a list of the top mortgage LOS providers.

Encompass by Ellie Mae

Designed for midsize to large mortgage lenders, Ellie Mae’s Encompass is a cloud-based loan origination platform that expedites and improves the digital mortgage process.

Encompass allows loan officers, underwriters, and other team members to track loan files throughout the entire origination process.  The system also provides systems for expediting the underwriting process. 

Key Features: 

Custom workflows, document management; loan tracking;  risk management functionality; internal audit features; integrated pricing engine; application programing interface (API) for application customization and integration.

Calyx

Calyx is a cloud-based mortgage loan origination system (LOS) designed to provide service to any level of lender.  Calyx provides three different solutions depending on the type of lending professional.  Calyx Point is designed for mortgage brokers, Calyx Point Central provides service to small to medium sized mortgage companies with Calyx Path is designed for larger financial institutions. 

Key Features: 

Custom workflows; document management; loan tracking; internal audit features; centralized reporting; granular access rights

LendingPad

A cloud-based mortgage loan origination system (LOS), LendingPad aims to help businesses streamline and manage their loan origination processes and improve customer experience. 

LendingPad offers specific editions for brokers, lenders, banks, credit unions, and institutions to improve collaboration between different lending professionals. 

Key Features: 

Custom workflows, document management, loan tracking; internal audit features; post closing audit features; secondary workflows for investors.

Final Thoughts

Whether you are a smaller broker or large bank, an LOS is a significant investment in a lender’s tech stack.  The process for finding the right LOS should include a review of the processes and procedures that make up your lending operation.  The information used by your team will affect the level of customization you will need.

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