Gaining the Scale Advantage in Mortgage Lending

As the mortgage business becomes increasingly scale-driven, competitiveness calls for the ability to streamline processes while also improving service. In response, McLean, Va.-based business consulting and systems integration firm BearingPoint has introduced the Readiness Assessment program for mortgage companies. It is designed to foster implementation of image capabilities.

BearingPoint's Readiness Assessment program involves "not only a strategic assessment, but a comprehensive set of custom development, implementation, process improvement, and organizational change services that mortgage companies will need to successfully deploy in an imaging environment in the new year," according to David Hisey, managing director, BearingPoint.

Document imaging can transform the mortgage enterprise, especially the larger lenders and servicers with aggressive growth strategies, Hisey explains. "When you start looking at the complexity of managing millions and millions of these big paper files, that's driving people to look at different solutions as well, so they don't have all this stuff just sitting in big warehouses."

Tapping the Potential

Imaging and document management are hardly new technologies to mortgage providers, he concedes, but emphasizes that their potential has not yet been tapped. "If you look at the bigger mortgage companies, imaging and document management have been done to a limited degree but not extensively," Hisey says. "The general concept would be to use [these technologies], not only to facilitate storage, but also to make it easier and less costly." There's also an opportunity to "combine some of the document management and image with workflow; that's some of the transformation activity, where you will get efficiencies and saving, more than just how you store and manage documents."

The Readiness Assessment initiative is targeted at "the top-20 type of originators and servicers," Hisey says, and has been launched with several clients that Hisey declined to name.

In addition to "cost, efficiency and better customer service," several other factors are reshaping the mortgage business, according to Hisey-compliance, for example. "There are requirements in terms of how long you have to store files," he says. "If you're going to use workflow as a transformation tool, you can embed some of compliance tools and try to automate that." The industry is also seeking to eliminate the need for hard copies by various counterparties.

Also, mortgage processing systems themselves are due for some changes. "A lot of banks are still wrestling with their key application systems," Hisey says. "On the loan servicing side, a lot of institutions are on the Fidelity (Fidelity Information Services, Jacksonville, Fla.) product, which is fairly dated technology, although they're trying to enhance it. We'll probably see more of really being able to better bring together various systems-be they origination, servicing, or customer management systems- to exchange data, to have more of a common customer view, so they can be used to sell other real estate-related products, or as part of a retail banking strategy, to cross-sell other banking products."

It's about scale for institutions such as Wells Fargo, Washington Mutual and JPMorgan Chase, which are leaning towards growth in mortgages, Hisey says. "[They] are using it as one of their key products to leverage other banking products," he says. "You have to have a single view of the customer. We're starting to see people looking at it that way, trying to develop the system architectures and interfaces to do that."

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio