Lenders must have clear expectations for their vendors and understand their own strengths and weaknesses in order to successfully implement a new loan origination system, according to a pair of mortgage executives.
"The key to a successful LOS implementation is communication and articulation in the vendor relationship. Communicating, at the outset, what each organization brings to the project is important," says Jeremy Potter, Norcom's Chief Compliance Attorney.
“We learned that the pain points are inevitable but useful as long as both parties collaborate. Now, our experience has improved how we approach our process,” he added.
The need for a new LOS arose from the company's growth as a lender, as its previous broker-focused platform lacked the level of compliance control and reporting needed to handle Norcom's $750 million in annual originations across the wholesale and retail channels, and a growing correspondent business.
One challenge in the initial implementation process is striking the right balance between promoting user buy-in and prioritizing the needs and configurations of all stakeholders.
"One area where compliance and IT work together is making sure that testing and customization requests factor in everyone in the room," says Samuel Lerner, Norcom's senior IT analyst.
"It's crucial to have a well-defined roadmap for your LOS implementation team," he added.
"There is real strength in getting buy-in across the organization," says Potter. "Disruption, particularly to the sales staff, can complicate even a smooth implementation. For example, choosing and communicating in advance what defaults have been established avoids surprises."
During the implementation of the current system, Norcom hired a consultant to help build the configurations and assist with the transition.
"The consultant was definitely crucial in getting this implementation done They really helped with a lot of the coding that would have been difficult for someone in IT to do without the previous experience of the system," says Lerner.
All LOS technologies are not the same, and Potter advised lenders to have a keen understanding of what their organizations are good at and find a system that excels at meeting those needs.
"When we began this process, we knew our status quo was not acceptable. We needed this upgrade," he says. "The fundamental approach for any organization is to be honest about its own needs and capabilities.”
