Loan origination software is the heart of every mortgage office. You can’t be in the mortgage business without one in 2020. Today, your LOS will greatly determine your efficiency in operations and even the talent you can bring on your team. So, whether you are just setting up shop, or are looking to upgrade, what options are there? How do the top mortgage software brands compare?
What Is An LOS?
A Loan Origination System (LOS) is a set of software built to support the processing and application process during a mortgage life cycle. It allows lenders & loan officers to easily submit and retrieve data, loan processors to process and index information easily and meets the needs of financial institutions that pull reports and validate personal information. It essentially connects the dots digital of many manual process that used to be very time consuming. Saving time for all of the many parties involved in the mortgage process.
According to Energias Market Research the global lending software market is set to experience a further 11.6% compound annual growth between now and 2024. That will put the value of the industry at over $5.5B.
The bulk of the value of this sector is in loan origination software, residential mortgage loans, and in the US.
While small offices can find very affordable solutions, larger lenders can spend $100K to millions per year maintaining and upgrading LOS, and between 6 to 24 months to integrate new software.
What Mortgage Offices Need in a LOS
According to a white paper from Cognizant origination processes supported by LOS can cover everything from lead prospecting to application capture, pricing loans, generating disclosures, ordering third party services, underwriting and clearing conditions, and drawing up closing docs.
Most mortgage offices do not use this full range of potential uses with a LOS. Branches, brokers and individual loan officers and teams have typically only utilized core features from preparing 1003s and disclosures to processing and handling underwriting conditions.
Other elements of the process have typically been completed by end lenders. While mortgage marketing, and customer relationships management and post closing activities have seemed to be far better completed by using other loan tech and software services.
What to Look for in a LOS
Choosing a LOS is a big deal. Here are some of the key factors to evaluate when making a decision.
- Integration with front end POS software
- Integration with mortgage CRM software
- Interfaces with current third party vendors
- Product and pricing tools
- Customization and branding
- Ease of implementation
- Compliance tools
- Training requirements and cost
One of the most important factors is how familiar mortgage professionals are with the LOS. While the most talented may be fully capable of diving into a new system and learning it, many processors and loan officers may be very married to the LOS they’ve used for a decade. So, will your choice make it easy to attract top talent and keep them?
5 Top LOS Software Options in 2020
- Probably the most established LOS brand in the business
- Interfaces with 200+ vendors
- New Zip feature attempts to make it easier to interview borrowers
- Some complain it is hard and lengthy to learn
- May not be updated as regularly as newer options
- Being older it may look more like an original Macintosh than the iPhone and Mac experience you are used to
- New 18.3 update in August 2018 could help speed up processing
- Designed by Ellie Mae
- One of the most established names next to Calyx
- Some users complain of frequent software crashes
- Poor email integrations
- Runs slowly
- Integrates with BNTouch digital mortgage solutions
- One of the most modern LOS solutions
- Works for retail, wholesale and correspondents
- Like a petal it has many parts, and often requires a lot of windows to be open
- Newer entrant to the LOS space
- Support staff may be more tech savvy than experienced in mortgages
- Emphasis on modern and intuitive User Interface
- Fast performance and great scalability
- Software is cloud based and can be used from anywhere
- Focus on customization may yield a longer set up
- No customer portal or interface
- A newer name in the industry
- Works with DU and Fannie Mae Early Check
- Mobile loan officer tools
- Blue Sage’s CEO is former COO of Ellie Mae
- Much newer LOS provider
- Very limited feedback and LOS reviews from other users
- No direct access to DU
- Allows LOS, POS & CRM to be viewed from one place
- A new player with a big focus on the human element
- Software is included in an AIME Membership
- Product not fully released yet, no demo available
- Focus on simplicity may reduce customization
- Many offerings in one, may not be able to compete with more focused options
As a mortgage originator your LOS is the heart of your business. Your efficiency and ability to provide a great experience to borrowers will depend a lot on the quality of your LOS and the ability of your team to use and wield it well. Switching loan origination software can be very costly and challenging on many levels. Next to your mortgage POS and CRM, this is a critical part of your tech stack. Which will you use?