Technology in The Mortgage Business

How is technology used to quote mortgage rates?

The Old Way
In the past loan officers received rate information by fax or email. These rates sheets would include base pricing on one sheet and another sheet would represent “adjustments”. These adjustments would include price adjustments for loan specifics like property state, credit score, loan to value ratio and loan size along with many other potential adjustments.

To quote a prospective applicant could take several minutes and involved the element of “human error” that could result in over or under quoting the borrower. Also, if the loan officer had access to multiple lenders like most brokers and mid sized mortgage bankers then you can multiply times the number of potential investors available to each loan officer and a lot of time is spent on making one quote.

The New Way
Times have changed; there are several systems available to lenders now that allow us to run an internal “Best Execution” model for pricing.

We use the system provided by Sollen Inc. The investors that buy our loans have all programs, pricing and loan level adjustments sent to Sollen with every price change. Loan officers enter the consumer and property profile and the system returns the best available pricing from all of our investors with all adjustments included. Resulting in accurate offers being returned in seconds and human error is reduced.

Pricing is also “real time” as the rates we see are updated within seconds of any investor changes. (For more information on Sollen, Inc. check out this Podcast interview)

The Benefits
Using a best execution model allows us to query all of the investors that are competing to purchase our loans for their best price, at that moment for a particular scenario. Part of the beauty of technology is that we can save that consumer profile in the database and return to it when that customer calls us to check pricing on a different date.

This technology allows our loan officers to spend more time on the phone with potential clients and less time fumbling through rate sheets to determine a quote.

In future posts I will be providing information and insight to how technology is being used to improve the lending process for service providers and consumers. My next post will discuss how we use technology to manage a large database of prospects and clients.

I look forward to being a part of the Geek Estate team and welcome your comments, questions and suggestions.