The Ultimate Guide to Loan Origination Software

The Ultimate Guide to Loan Origination Software 2

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Why Switch to a New LOS? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

LOS Features You Need . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Common LOS Integrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Steps in the LOS Buying Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Steps to Implementing Your LOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Which Calyx Product Is Right for You? . . . . . . . . . . . . . . . . . . . . . . . . 21

Table of Contents


Introduction

Running a successful mortgage

operation is tough. Interest rates

are higher than in the past, thus

discouraging homeowners from

considering buying or refinancing.

Non-bank lenders account for

more than half of mortgages.1

Stricter federal lending guidelines

have changed the way lenders

operate and have even driven

some from offering mortgages.2

And consumers have plenty of

mortgage options to choose

from—so they won’t hesitate to

overlook ones that fail to provide

an optimum borrower experience.

With all these challenges,

lenders and brokers can’t afford

to let inefficiency or obstacles

get in the way of successful

processes. This includes the

loan origination software (LOS)

mortgage professionals use to

help borrowers secure financing

and realize their home ownership

dreams. A great LOS is the perfect

complement to the hard work

mortgage teams put into the

process while a mediocre LOS is a

barrier to success.

Mortgage bankers and lenders

need quality loan origination

software to keep their operations

profitable and stave off the

competition that seems to be

coming at them from every angle.

Broker and lending teams need an

efficient LOS to drive more loans

without getting bogged down in

busy work.

With all these challenges, lenders and brokers can’t afford to let inefficiency or obstacles get in the way of successful processes.


Ultimately, borrowers need a customer-focused system to take some of the

stress and inconvenience out of the process.

This guide will focus on why you might need a new LOS, features you should

look for in a solution, and steps toward choosing and implementing the best

software for your needs. Our guide will show you how to find software that will

always be there when you need it.


Why Switch to a New LOS?

Understandably, some mortgage

professionals are hesitant to ditch

an existing LOS. They may have

invested significant capital into the

software, and the idea of spending

more money for a new system

when the old one is adequate

seems wasteful. Moreover, you and

your team already know how to

use your LOS; taking the time to

learn something new may feel like

a hassle. Why change the status

quo, even if the status quo

is frustrating?

Moving on from a disappointing

LOS is more than an organizational

preference—subpar software

impacts your mortgage operation’s

bottom line. An inefficient LOS

results in fewer closed loans,

which leads to fewer profits. The

cost of a new software is justified

if the investment saves money

and generates added revenue.

Furthermore, if competitors are

closing loans faster than your team

and providing a better customer

experience, that’s lost business

for your company. The current

mortgage environment is difficult

enough; your LOS shouldn’t

contribute to the challenge of

running a successful

mortgage business.


Consider these factors when deciding if it’s time for a software upgrade:

Speed

Securing a mortgage takes long enough for borrowers; an inefficient loan

origination process shouldn’t cause further delays. If your LOS is trying to

deliver new features with outdated technology, a lack of speed is inevitable—

and could have your customers wondering if they should switch to a

more nimble competitor. Modern technology is essential to attracting and

impressing today’s borrower. Features such as e-signatures, digital interviews,

and borrower web portals, as well as a platform built to run on mobile devices,

improve speed and make life easier for borrowers.

Moving on from a disappointing LOS is more than an organizational preference—subpar software impacts your mortgage operation’s bottom line.

Data Management and Workflows

An LOS that bottlenecks your data management and workflow increases

frustration and decreases the number of loans that can be closed. Even in

this digital age, some platforms still require paper forms and manual and/or

duplicate data entry. An LOS with easy access to document storage can greatly

enhance efficiency.


Current Workflows

Another inefficiency of a stale LOS

is the inability of multiple people in

different roles to work on various

components of the loan at the

same time. Software can allow

users simultaneous access to files,

thus facilitating faster workflows

while maintaining coordination

and compliance.

Trust

LOS providers vary not only in

the quality of their product, but

also in the quality of their service.

Too many lenders have been

burned by software upgrades

that never materialized, features

that didn’t work as planned (or

weren’t included), and promises

that weren’t kept. If you can’t

reasonably trust the provider that’s

currently licensing its LOS to you,

find a partner that is committed to

improving processes and enabling

your team’s success.

Remote Capabilities

The ability to work remotely isn’t

just an issue of work/life balance;

it also benefits borrowers. Loan

professionals can work wherever

and whenever they need to

and take the process directly to

borrowers. Again, this efficiency

boosts the number of mortgages

that can be successfully processed,

which ultimately boosts profits.

Weak Reporting

Robust, customizable reporting

(including state and regional data)

gives lenders the intel necessary

to make better decisions in

the long term. An LOS without

strong reporting capabilities fails

to provide the comprehensive

overview lenders and brokers need

to drive their mortgage business.


Compliance

State and federal loan guidelines

are constantly evolving, and the

Consumer Financial Protection

Bureau (CFPB) continues to

provide oversight on Fair Lending

practices, borrower rights, security,

and more. An efficient LOS

includes all federal compliance

mandates with additional training

features available as add-on tools.

Cloud Capabilities

Not too long ago, the idea of an

LOS and any mortgage platform

operating in the cloud was a pie-

in-the-sky dream. Today, the

technology is not only a reality,

but also a preference for many

lenders and brokers who seek

greater agility, less IT burden,

hosting hassle and cost . Moreover,

borrowers and loan professionals

like to tap into the software

anytime and anywhere they wish.

Changing Workflow

Requirements

Workflow needs vary among team

members, your system should be

nimble and ready to address those

varying needs. Today’s mortgage

operation must scale as the

business grows and the

market changes.

Today, the technology is not only a reality, but also a preference for many lenders and brokers who seek greater agility and less IT burden.


LOS Features You Need

Loan origination software—

and, really, the entire mortgage

process—has come a long way in a

relatively short amount of time. For

example, the idea that a borrower

could apply for a mortgage on their

cell phone was far-fetched just 10

years ago; today, it’s functionality

that consumers not only enjoy, but

also expect.

To effectively compete in the

mortgage industry today, lenders

and brokers require certain modern

functionalities, as well as features

that go above and beyond what you

might expect from a typical solution.

After all, today’s innovations are

tomorrow’s basics. Here are several

features you should look for in your

next LOS:

Thorough Compliance

Robust compliance functionality

not only saves time, but also keeps

you from compliance issues with

the CFPB and other regulatory

entities. A great LOS should

understand and work with current

requirements, be customizable to

the user’s unique needs, and have

the ability to be easily updated

so when guidelines change, the

software can quickly adapt.

Borrower Point-of-Sale

Capabilities

Point-of-sale (POS) lending is

the current trend in the banking

industry, and it takes on added

importance for mortgage

operations that compete with non-

bank lenders that tout their simple

digital application processes.

Learning how the integrations process data to increase efficiencies and cut costs is an integral part of determining the value of your new system.


Automated Pricing

Scrambling through the system to

determine a mortgage product’s

costs to the borrower can be time-

consuming for the lender or broker

and the client alike. Moreover, this

manual approach may not find

the best pricing and/or product

for either party. Automated

pricing takes the accumulated

loan origination data and quickly

and accurately delivers a range

of options, with costs, so you can

determine the best option for

the borrower.

Processing and Underwriting

A great LOS obviously incorporates

quality integrations that improve

the complete origination process,

from pre-qualification to closing.

However, all are not created

equal when decision makers

dig a little deeper. Learning how

the integrations process data to

increase efficiencies and cut costs

is an integral part of determining

the value of your new system.


eClosing

Another modern time-saver that

borrowers appreciate and that just

about everyone on the business

side of a home sale benefits from is

eClosing—and the best avenue to

host eClosing functionality is your

LOS. Top-notch software either

hosts eClosing functionality or

includes integration partners that

offer all the data and documents

needed to proceed with closing.

Physical paperwork is greatly

reduced, the risk of human

error decreases, and loans are

completed (and borrowers are in

their new homes) in less time.

Comprehensive Reporting

and Analytics

Data is king in today’s mortgage

game, and a great LOS delivers

with features such as complete

audit trails, standard and custom

reports, and centralized reporting

from all parts of the pipeline. The

analysis capabilities from this

data help mortgage professionals

make strategic decisions both on

a case-by-case basis and from an

overarching point of view.


Common LOS Integrations

Mortgage lenders and brokers

rely on a variety of third-party

service providers to expedite and

complete the loan origination

process. In the past, these

providers’ platforms existed apart

from the LOS, which slowed

down processing times and

reduced efficiency for mortgage

professionals and borrowers.

Integration that was possible

between platforms wasn’t

perfect—solutions didn’t play well

together, and users often still had

to exit one program and open

another to get the data or initiate

an action or report.

The modern LOS eliminates

platform-jumping and data

duplication by seamlessly

integrating third-party services

and functions directly into the

solution. Moreover, an outstanding

LOS has already been designed

to work with top vendors and

their solutions. Below are the

integrations your LOS

should include:

Appraisal services

Automated underwriting

Automated valuation model (AVM) reports

Bundled services

Closing documents

Credit reporting

Flood certification services

Fraud detection

Initial disclosures

Mortgage insurance interface

Product eligibility and pricing

Title/escrow services

Verification services


An LOS with strong integration capabilities allows the user to check credit,

determine flood zone status, assess private mortgage insurance (PMI) cost, and

get the ball rolling on title and escrow—all without leaving the system. Such

functionality makes for a smoother mortgage process that ultimately frees up

lenders and brokers to serve more customers.

Your software should allow you to pull down a menu to choose an integrated service, giving access to any pertinent data within the system.


Steps in the LOS Buying Process

With so many LOS solutions on the

market, it can be overwhelming

and confusing to navigate through

the options. The features and

integrations already described in

this guide must be considered, as

should your pain points and the

goals you have for your

next solution.

Realizing your mortgage business

needs a better LOS is the first step.

The next steps are to determine

which LOS is best for your

requirements and then select one

that meets those needs.

1. Identify who should be

involved in the selection

process

Many stakeholders may be

involved with the purchase of

an LOS. mortgage professionals

obviously should have a say, but

executives in charge of buying

decisions, IT personnel tasked with

implementing a new solution, and

compliance officers who might

need access to the software may

also bring important input to the

process. Form a committee and

work together to chart a path to

the next LOS.


2. Determine the goals a new

LOS will achieve

This step is essential: What do

you want from your next LOS? Of

course, you want it to perform

better than your current software,

but what else do you want it to

accomplish? Consider these goals:

• Size of business

• Better customer experience

• Streamlined user experience

• Greater attention to compliance

• Remote functionality

• Paperless documentation

Assessing your system’s goals

goes a long way toward choosing

an LOS that makes sense for your

mortgage operation. For example,

if you prefer an on-premises

solution, a cloud-based LOS might

not make much sense. Similarly, if

you are originating just a few loans

a month, you may not need all the

luxuries of an advanced solution.

3. Determine the mortgage

department’s needs

Along the same lines, assess

what the people who will be

working directly with the LOS

need from it. The size of your

organization and complexity of

transactions are key indicators in

determining your department’s

needs. For instance, the ability for

multiple people to simultaneously

access the same application and

functionality on mobile devices.

Mortgage professionals may also

desire greater control over the

LOS in terms of customization and

configuration—which must

be accounted for when choosing

a solution.

Assessing your system’s goals goes a long way toward choosing an LOS that makes sense for your mortgage operation.


4. Come up with a requirements

list and a scoring rubric

Talking about goals and needs

isn’t enough to enhance your

selection process. Write your

requirements down and rank them

in order of importance. A checklist

of your selection criteria ensures

that you’ve assessed everything

important to you in a potential

LOS. You can take this action a

step further by creating a scoring

rubric that gives a numerical value

to each item on your list. An LOS

with an impressive feature would

get a higher score than one that

is simply mediocre in that area.

The accumulated score offers an

additional method of evaluating

solutions.

5. Research vendors in the

LOS space

You can choose from plenty of

providers in the LOS space, all

offering platforms with features

unique to their respective

solutions. Take your time to

examine what each vendor has

to offer. Look for online reviews

and see what industry experts

think about various solutions. The

technical features of an LOS aren’t

the only consideration; what do

vendors offer in terms of customer

service and tech support? Talk to

other lenders and brokers in your

network about the software they

use and whether they are happy

with their provider. The more data

you can collect (both objective

and subjective), the better

equipped you’ll be to narrow

down your choices.


6. Contact vendors that meet

your criteria

All your research has led you to

a small group of providers that

might have the LOS you need to

take you into the future. Now you

can contact them to learn more. It

may seem like an obvious piece of

advice, but it bears repeating: Ask

plenty of questions! With the list of

features and requirements you’ve

assembled, inquire about every

point, even if you know the answer.

You might get a sales pitch,

but you may also get advanced

answers that will help build your

confidence in the prospective

vendor.

7. Set up first round of

demonstrations

Hopefully, you’ll identify several

options that you will want to see

first-hand. Set up demonstrations

with these providers and challenge

them to show you why theirs is

the best LOS. Be sure the vendors

are thorough, and ensure each

provider is enthusiastic in their

pitch but also answering your

questions—if the presenter is

evasive when you ask a question

or want to see more, it may be

because a feature isn’t as robust

as you would like or doesn’t exist

(and the vendor knows it). Ask

to see mobile capabilities, and

put yourself in the minds of the

borrower: Will this solution be easy

for them to use and interact with?


8. Narrow the list to 3

After seeing demonstrations from several providers, pick the top three to five

that impressed you the most and set up a second round of demos. Remember

your criteria from before? Ask the finalist providers to show you exactly how

their solutions address each criterion. Now is the time to explore every nook

and cranny of the LOS. You don’t want to discover after you’ve chosen and

implemented a solution that it lacks an important feature or functionality you

need. At this stage, also confirm pricing so you can calculate total cost of

ownership (TCO; more on this a little later).

Honestly assess how much a particular LOS improves upon the one you currently use.

9. Pick a vendor

With all the knowledge you’ve gained through your research, the final step is

picking a vendor from your final three. Review your criteria one more time and

determine which solution meets them the best. Honestly assess how much

a particular LOS improves upon the one you currently use. Also assess which

solution best fits into your budget. Your intuition should also play a role in your

decision—which LOS, based on the presentation and dedication, did you feel

most positive about? Take all these factors into account and pick a solution.

This seems like a lot of effort, but once you reach a decision, streamlined

processes, a better customer experience, greater efficiency, and an improved

bottom line await.


Steps to Implementing Your LOS

The shiny new LOS that you carefully researched and purchased must be

implemented into your business and integrated with other systems. After

implementation, training will be necessary so you and your team can hit

the ground running with the software, processing loans faster and serving

customers better. Implementation can vary depending on your

organization’s needs.

Once you have signed the proposal, the implementation process can include:

Discovery:

The implementation team will

interview relevant stakeholders in

your business to understand the

current process and the desired

process by implementing

the software.

Setup:

The team will gather all required

information to configure the

software, such as all users—with

their roles, access, and licenses

identified—and all business

units’ locations and licensing

information. Depending on your

implementation, this information

may also collect software template

preferences, requirements

for training team members,

and credentials for third-party

integrations. This information will

allow the implementation team to

set up your LOS onsite or remotely.


Testing:

For more complex installations, the

team will spend time building the

LOS to match your processes and

conducting end-to-end testing to

ensure a successful launch. During

this time, each team member is

properly trained and equipped with

additional training materials.

Launch:

The LOS provider guides your

team through the implementation

process, including a smooth

cutover to your new system.

Your organization should also

have access to post-live support

through phone and email.

The LOS provider guides your team through the implementation process, including a smooth cutover to your new system.


Which Calyx Product Is Right for You?

With so many LOS options on the

market today, researching will

take time and expose you to a

wide range of solutions, features,

and philosophies. What many

lenders and brokers discover is

that an established provider with

a long history of supporting and

understanding the mortgage

industry is their best bet in

choosing an LOS that addresses

all their needs and all the needs of

their customers.

For more than 28 years, Calyx has

been at the forefront of improving

and revolutionizing the mortgage

process for lenders and brokers.

By working with the smartest,

most experienced minds in the

mortgage and tech industries,

we’ve streamlined, integrated, and

optimized all phases of the loan

process. Our products are like no

other in the industry—and so is

our reputation for serving

our customers.

For more than 27 years, Calyx has been at the forefront of improving and revolutionizing the mortgage process for lenders and brokers.


Calyx Point (For Mortgage Brokers)

Designed for lenders and mortgage brokers, Point is the all-in-one LOS for

easier loan marketing, prequalification, origination, and processing. All the

features, forms, and reports necessary for a successful application are at your

fingertips. Highlights of Point include:

• Monthly SaaS pricing model: Software-as-a-service (SaaS) pricing keeps

operational overhead costs in check and offers a predictable expense for

budgeting and accounting purposes.

• Templates: Save time and ensure consistency with preconfigured information

via master files, loan programs, closing costs, data import/export, underwriting

conditions, and more.

• Prospect database and pipeline: Point users capture, create, and save pre-

application data for prequalifying prospective borrowers. The pipeline is more

efficiently managed this way, and prospect files can be easily converted to

borrower files before processing the loan.

• Marketing and sales tools: Applications such as rent-versus-own tools, open house

flyers, loan comparisons, and pre-approval letters strengthen relationships with

borrowers by providing advice and communication.

• Loan checklists: Improved file management allows users to track loan progress,

status, documents, and conditions.

• Configurable loan pipeline view: Customizing the pipeline column with the most

important information improves file processing productivity.

• Document management capabilities: These include streamlined document

storage, request, and exchange, as well as electronic signature functionality that

provides easy access to all loan-related documents within the file.

With Point, customized process meets streamlined ease of use so you can

focus on your work, not your software.


Calyx Point Central (For Large Brokers or Small Financial Institutions)

Perfect for larger lenders, PointCentral pairs administrative control and top-

notch security in a single, centralized database. This solution lets staff work

on individual components of a single file while maintaining data integrity.

PointCentral includes all the features of Point and adds:

• Pre-built and customizable compliance rules: PointCentral comes with 31 rules,

customizable to your requirements, to ensure you meet federal

lending regulations.

• Anytime, anywhere access: Remote access to centralized loan data and templates

gives employees reliable access, regardless of location.

• Automatic file synchronization: Files are locked on the server when downloaded

and removed from the user’s local client when uploaded back to the server.

Quality, accuracy, and file integrity are maintained, even when multiple users have

access to the same files.

• Centralized reporting: Users can generate management reports that retrieve data

from the entire corporate pipeline, not just one location.

• Granular access rights: Craft flexible, granular rules that complement your business

practices and processes. Rights can be configured for multiple locations, users,

and user roles, thus decreasing the potential for errors with customized warnings

and compliance rules.

In one click, securely exchange data with hundreds of service providers. More

than 200 vendors are integrated into PointCentral via the Calyx Network,

providing product pricing and eligibility, closing documents, compliance

services, and more. PointCentral delivers everything a successful mortgage

business needs from an LOS: efficiency and ease of use along with advanced

controls and administration.


Calyx Path (For Large Financial Institutions)

Path is Calyx’s mortgage processing innovation, taking a traditional LOS to

the cloud for increased speed, conversions, and customer satisfaction. Path

digitizes the entire loan origination process, thus offering unprecedented

efficiency for mortgage professionals and borrowers.

Features of our two Path products, Path Retail and Path Enterprise, include:

• Fast launch: Between our cloud- and data-based solution and our account team

dedicated to your success, you can have Path up and running—and realize a faster

ROI—in as few 21 days, the quickest launch frame in the industry.

• Virtual desks: Mortgage professionals can use Path to complete tasks and convert

leads to loans from their computers or their mobile devices.

• Predefined roles: Path users maintain complete control of workflows, and team

members can complete tasks anywhere.

• Zip: Borrowers love the convenience and ease of Zip, Path’s mobile-friendly loan

interview and automated data transfer application..

• Automated pricing engine: Embedded into Path, this feature manages eligibility

and loan locking and helps reduce errors and increase efficiencies.

• eClosings: Focus on people, not paperwork. Path partners with best-in-class

document providers for 100 percent paperless, digital eClosings.

• Enterprise: Path Enterprise offers a fully configurable LOS with three channels

operational on a single platform. This comprehensive solution is designed to

be configured specifically for each lender’s operational structure and business

channel workflows.


More Than Just Software

A Calyx LOS delivers unparalleled

functionality, innovation, and

results. But the excellence doesn’t

stop with the software. Calyx

provides outstanding customer

service and resources for lenders

and brokers that trust their

mortgage businesses with our

solutions. Among the things we

offer our customers:

Customer support via phone

and email

Training webinars and videos

A comprehensive Knowledge

Base offering self-service

help such as user guides,

product release notes, video

tutorials, and more

Professional services and

customized online or on-site

training from senior-level

mortgage and technical

professionals

When you adopt a Calyx solution,

you aren’t just contracting a

vendor—you’re enlisting a partner

that will be there through thick and

thin to help you get the most from

your LOS. You and your customers

deserve no less.

A Calyx LOS delivers unparalleled functionality, innovation, and results. But the excellence doesn’t stop with the software.

Today’s mortgage lenders and brokers face challenges—from federal regulators,

from the evolving and tighter marketplace, and from borrowers that demand

convenience and excellence. You need an LOS that meets and conquers these

challenges. Calyx Software offers a variety of solutions to fit your needs.

Request a Demo of Point or PointCentral

Request a Demo of Path

Calyx Software

800-362-2599

[email protected]

[email protected]

1. Marte, Jonnelle. “Non-Bank Lenders Are Back and Even Bigger than Before.” The Washington Post, WP Company, 21 Sept. 2018, www.

washingtonpost.com/business/economy/non-bank-lenders-are-back-and-even-bigger-than-before/2018/09/21/5fc026a2-bc48-11e8-8792-

78719177250f_story.html?utm_term=.748f18eaca9f.

2. ABA Banking Journal. “CFPB Issues Analyses of Qualified Mortgage Rule.” ABA Banking Journal, 11 Jan. 2019, bankingjournal.aba.com/2019/01/

cfpb-issues-analyses-of-qualified-mortgage-rule/.

https://info.calyxsoftware.com/demo

http://www.pathsoftware.com

The Ultimate Guide to Loan Origination Software

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