How Small & Mid-Sized Mortgage Companies Beat the Competition with Custom Software

In theory, the home loan process is pretty simple. A mortgage company can make more profit and grow as it processes and closes more and more loans. The margins can be thin, so volume is everything. The hitch in the plan is that closing a loan is a fairly long, detailed process that includes lots of documentation and people, such as tax returns, letters of explanation, W2s, loan processors, underwriters, your team—and of course, borrowers!

Process is everything when it comes to doing more loans quickly and accurately. Every loan has a heartbeat, and there are important actions that need to take place at precisely the right time—or the loan can fall apart (for example, when a lock expires).

Everyone on your team has a precious job, and all of their time should be relentlessly protected and focused on the right thing at the right time.

Are your people focused on what they do best?

I'm sure we can all agree that people aren’t necessarily pros when it comes to process. They make mistakes. Some do better than others, but the personalities in the mortgage industry frequently come from Sales. And salespeople don’t always or excel at—or even like—tedious process-driven tasks (with some exceptions, of course). In many instances, even the most organized individuals struggle to follow the myriad rules and steps in complicated and manual mortgage-specific processes.

As a business owner, you can define, plot, and plan solid process that your employees *should* follow, but for most, the struggle eventually feels like beating a dead horse. At some point, you need to realize that rather than beating up your team, you simply need to find a better solution so that you can move onto more important (and profitable) endeavors.


A good end-to-end process should be simple, automatic & automated

An effective loan-closing process should be simple, automatic and mostly automated. Your team should be liberated to focus on growing the business rather than remembering details like “client X’s W2 should be named ‘JOHN DOE 2015 W2.PDF’ instead of ‘DOE, JOHN 2015 W2.PDF’.”

While there has been significant progress made in recent years when it comes to loan software for mid-sized mortgage companies (and I’ve been exposed to a lot of it), I’ve often found critical features missing in out-of-the-box solutions. And even more frequently, I’ve seen solid attempts at a good feature, but in the end, the idea is rarely taken quite far enough.

More often than not, a company ends up using three or more different pieces of software (each piece doing its own special bit), but because none communicates with the other particularly well, you end up with fallible humans as the “glue” between them. What was intended to be a wonderful improvement ends up as a hodgepodge of finicky and brittle software solutions held together by overworked and frustrated team members who are forced to deal with awkward manual steps and exceptions—else the whole machine comes grinding to a halt. Even a small, simple mistake can have a ripple effect causing problems (and money!) for everyone involved.

What’s the solution to the madness?

Strategic investment in custom software can play an important role in addressing issues like these. A one-time investment can pay dividends for many years to follow and can improve how well your loan machine functions considerably. It also allows your team to do the parts of the process that they excel at (and maybe even love), instead of wasting mental cycles on things like remembering that a given file should be named differently for investor X than for investor Y.

Because software development can be costly if not done well, you want to be laser focused in your efforts. You don't want to use a developer’s time to test new ideas that may or may not work. And you certainly don’t want to be reinventing the wheel with features that your other software is already doing well. Rather, you need a team with experience in the industry and experience with industry-specific solutions to design and implement a system that works in your unique company ecosystem and circumstances.

The trick is focusing on parts of your business that falter...over and over, and week after week. Many of these problems may have even become an everyday cynical joke for your team. For example, you might find issues where people are bridging the gap between loan origination software and appraisal ordering. Or where your team is renaming incoming files from borrowers that never match what they should. Or perhaps where precious underwriting time is eaten up with reviewing documents that aren’t even ready to be reviewed. These problems—and many more just like them—can be resolved with tailored software solutions, making your team happier, more effective, and more profitable.

Speaking of profit, tailored software does not *always* mean expensive software. You may have heard the buzz word “Open Source” before—and how it has revolutionized countless industries. You may not be aware that tens of thousands of software engineers around the world have contributed millions of hours of software for use by anyone...for free. You need only a team that knows how to piece together the various components available to solve specific problems, and provide custom code for any gaps in the building blocks they find from the community. I have specialized in this very process for over a decade, and my solutions have saved my clients thousands of hours and millions of dollars in the process. I estimate that Open Source has reduced the costs for tailored solutions by over an order of magnitude (and in some cases, two orders of magnitude!) in the past ten years alone. In more conservative verticals such as the mortgage industry, the value of Open Source is only just starting to be realized. By leading the way, you can gain a competitive advantage over your competition.


In my experience, here are just a few instances where a tailored software solution can help:

  • Providing an up-to-date, clear interface for which documents and conditions a borrower needs to upload and satisfy
  • Keeping uploaded documents—and what conditions they clear—in an orderly, searchable structure that keeps file names consistent and easily shippable to other investors
  • Queuing up all conditions a borrower has outstanding until they are all 100% completed in order to reduce task switching for your team
  • Providing notifications and tasks to people in the process so that the loan can be pushed through the process as quickly as possible
  • Automating (electronically) the sale of loans to larger investors
  • Pricing (loan lock) automation
  • PDF generation, manipulation, fill-in, combining, and rearranging
  • Inter-office communication
    • Calendar
    • Policy information
    • Notifications
    • Pipeline view (loan status)
    • Underwriter FAQ




    I have seen countless attempts to solve each of these issues with out-of-the-box software solutions, and I have also helped companies customize and integrate these solutions to fit their companies. I have never seen a complete packaged mortgage suite that can run a mortgage business from A-Z.

    Until now, only the largest mortgage companies could afford to develop tailored solutions to meet their complete needs. But by utilizing Open Source technologies, and with the help of a knowledgeable professional to navigate the complexities of business needs and software solutions, small and mid-sized mortgage companies can not only streamline their workflows, but also grow and thrive—and do so without adding human labor to hold the ship together.




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    To learn more about how we're helping mortgage companies save time, reduce errors, and process more loans, check out our mortgage industry solutions page.

    A bit about Casey:

    Casey Cobb (Partner, Senior Software Engineer) has over 15 years of experience in web and software development. He has a B.S. in Computer Science and his specialties include Open Source web development (most notably Drupal), custom PHP, MySQL, jQuery, Zend Framework, mobile development, as well as project architecture and project management.