It is no secret that the mortgage industry is changing constantly. Since the collapse of the housing market six years ago, everyone involved in the mortgage industry has been working hard to create a more efficient and profitable market, despite the lingering low home prices. Borrowers and lenders alike have struggled with the negative hype in the media. In an attempt to make the loan process more efficient and profitable, lenders have turned to technology for help.
Profit margins are tight, which means that lenders don’t have much wiggle room. As we all know, there are strict regulations in place regarding the loans we make. Lenders are in a tough spot. Fortunately, technology has the ability to streamline the process and even speed it up. Many lenders are turning to cloud computing to support them in this venture.
What is Cloud Computing?
Cloud computing means that data and software programs are stored on the Internet rather than on your hard drive or in your data center. You don’t have to download any software or store it on your server. The programs and data that you use are accessed through the internet.
Cloudcomputing is a service that is offered to mortgage lenders who want to use technology to streamline their business processes, and it is offered on an alternative cost model. It does not have the usual up-front costs or ongoing investment requirements that come with many other technology options.
Mortgage lenders can access cloud-based loan origination systems (LOSs) that provide process automation, real-time collaboration, and increased transparency. The costs associated with implementing and maintaining a new technology system can be huge, but that is not the case with cloud computing. Cloud-based services are provided to mortgage lenders on an alternative cost model known as Success-based Pricing, which offers significant benefits in terms of cost and performance.
Cloudcomputing is delivered to the user via the Internet on a pay-per-use basis. The user might be charged based on time, transactions, or user count. The user is charged monthly, and can adjust usage based on their current needs.
What’s wrong with the old Mortgage CRM Software model?
The way that most mortgage lenders do business is outdated and expensive. Lenders can purchase their own loan origination system, but that requires a huge investment in your data center. You have to pay for servers, data storage, backup measures, and upgrades. It also presents ongoing costs in terms of maintenance and administration. Even the cost of powering and cooling the data center can be enormous.
Security is a significant issue, as well. Mortgage lenders deal with a lot of sensitive financial information, and that presents a burden to the lender to protect that information. Keeping up with the latest security measures is a major burden. Staff and resources must be allocated to maintain the infrastructure and protect privacy. When a mortgage lender goes with a self-hosted software program, the costs associated with that endeavor can account for more than half of the total IT budget.
Mortgage lenders aren’t tech experts; they’re mortgage experts, and they should be free to focus on that. You need to be free to focus on closing loans efficiently while carefully complying with regulations. In the past, mortgage companies simply didn’t have access to the programs that offered them the combination of security and application that they really needed. They had to develop their own systems. The costs associated with developing your own loan origination system and maintaining that are enormous.
As everyone in the mortgage industry knows, compliance is a huge issue. Compliance audits focus on two areas – loan quality and data security. If you host your own loan origination system, you take on the burden of data security and must be prepared for an audit of an area that isn’t your area of expertise. You must have a well-documented system for the control of that information. In addition, your systems must be able to change as regulations change.
Typically, compliance procedures are manual. Staffers may be forced to devote precious time to inputting compliance-related information instead of focusing on originating, processing, or closing loans. Compliance mistakes can have serious results, including fines and penalties.
All of these issues hit the bottom line. They affect your costs, and they affect your performance. Failing to update your old business processes puts your company at risk. Your staffers lose time when they have to deal with the maintenance of the loan origination system and manually comply with regulations. When loan volumes are low, your revenues may be insufficient to pay for the infrastructure that isn’t even in use. On the other hand, when business improves, you can’t scale the old business model to meet your new needs. You would have to invest even more money to meet your growing needs.
Cloud-basedMortgage CRM Software for increased productivity and efficiency
Cloud computing is a powerful, cost-effective solution. Cloud computing gives staff members and partners the ability to easily collaborate and share information. It connects users in the cloud, and it does so securely. This means that everyone involved is clear on what is happening through the loan process, can view that information easily, and has total transparency. Lenders need to exchange documents with insurance agents, investors, and other third parties. Having to send those documents out and wait for a reply slows down your process. Cloud-based software automates the process and protects privacy.
Cloud computing offers significant cost savings to mortgage lenders, because you don’t have to buy the hardware or infrastructure. You have low-cost access to the software that you need and a secure, global data center. There is no need for you to hire staffers to maintain the system.
Cloud-based software also offers rapid deployment. The cloud application is very easy to use. There is no hardware to be installed, so the program can be put into action quickly. Extensive customization is not required. You can easily configure the system to comply with your business rules, and the programs will easily integrate with the tools and systems that you currently use.
When you use cloud computing, the vendor will make sure that your version is always up to date. You don’t have to worry about taking care of updates or relying on your own IT staff for compliance. The vendor is committed to providing you with service that is reliable and always available. They provide the heavy-duty infrastructure that you need for guaranteed service.
When you choose cloud computing, your costs are predictable. You only have to pay for the service that you need. In terms of the big financial picture, you can categorize your infrastructure as an operating cost, not a capital expense.
Any software vendor will claim that they can make a program meet your needs; however, the process of customization can be long and expensive. It can also prohibit future upgrades. Cloud computing is different, because there is a high degree of configurability. The user can adjust the system to meet their needs, and the options for configurability are consistent throughout future upgrades.
Security is a key concern for cloud computing providers. In fact, cloud computing providers usually provide better security measures than a customer could achieve independently. They also comply with security regulations and auditing programs.
Business can ebb and flow significantly in the mortgage industry. When you use cloud computing, your IT costs can fluctuate along with your revenue. Success-based pricing combines a monthly charge and a fee per closing, so your costs are lower when you are doing less business. The monthly fee that is assessed is based on only the services that you use, so you aren’t paying for something you don’t need. This model allows you to tailor technology services to your needs.
Cloud-based Mortgage CRM will move you forward, no more expensive projects
The mortgage industry has faced significant challenges in recent years, but we have come through. New purchases are taking the place of refinances. Experts predict that the total volume of mortgage transactions will decline in 2014, which makes things tough for independent mortgage producers. You have to be able to add value to make it in this industry.
Cloud-based Mortgage CRM provides mortgage originators with an opportunity to set themselves apart from the competition, decrease their costs, and become more efficient.
Clearly, cloud systems offer significant benefits in terms of cost, security, and performance for mortgage lenders.
Focus IT offers cloud-based Pulse™ Mortgage CRMto mortgage lenders. Pulse™saves your business time and money by helping you perform critical sales, production, lead management and post-close tasks with fewer resources. With Pulse™ there is no extra hardware to buy, and no additional management required to oversee it all. Take the hassle and high cost out of your client management solution by using our pay-as-you-go service.
Learn more about Pulse™ cloud-based Mortgage CRM