The switch to a new Mortgage Loan Origination System (LOS) contract presents inherent challenges, but with the right partner the rewards can outweigh your risks.
OpenClose recognizes that providing excellent customer service and offering a topnotch and market-leading software solution like we do does not always immediately dispel potential customers’ hesitation to change their existing Mortgage LOS. This is because oftentimes banks, credit unions and mortgage lenders might not want to take this leap for a myriad of reasons — such as time constraints, high costs, etc. that they fear they won’t recoup.
But, keeping up with the times is apt to force the issue when the institution’s mortgage LOS contracts expire. That’s why instead of holding back from exploring new possibilities, many institutions today are viewing this time as an opportunity to improve their LOS system and to scout for a better suited solution for their loan officers’ and borrowers’ ever-changing needs along with the demand for improved, more efficient and more sustainable technology.
It is important to remember that an institution’s current LOS provider might have been the best fit for its needs in the past. But, the length of time that has transpired under the old contract — typically between 3 and 5 years — and with the advent of new technologies and innovations, an alternative LOS might be a better fit for an organization’s current and future business needs.
Institutions should even consider past LOS candidates that they may have rejected previously since these systems might provide updated solutions to address the fresh challenges that your institution faces.
This post outlines the steps in selecting the right LOS if companies decide to switch. By breaking down the steps, this would help companies to seamlessly navigate the process of finding the right LOS partner. For more details beyond the below, watch this video.
• Start an LOS review process roughly a year before the current LOS contract expires.
• Do research on current LOS options by talking to both associates and coworkers. Ask about the LOS they are using and what they have heard about the best tech available on the market. This process might take a few weeks and might involve conducting initial due diligence on up to 7 LOS providers.
• Narrow those 7 alternatives down to between 3 and 5 LOS tech providers. Once this is done, set up an initial, quick demonstration with each one of them.
• Collect feedback and questions from your team after the demonstrations.
• Use the data collected to write an RFI / RFP, which can then be distributed knowing that the proposals will be returned in around 30 days. This part of the process can take anywhere from 20 to 45 days.
• Read, examine, clarify and score the returned RFPs, which means your institution can now hold the second set-up demos with the selected LOS providers. The goal is to narrow the selections down to 2 to 3 finalists.
• Determine who will be the better technology partner for the company’s specific needs (today and projected for tomorrow) by choosing from the final contenders. This series of moves have likely taken roughly 3 to 4 months so far, but with 8 to 9 months still remaining on the company’s current LOS contract.
• Get a detailed pricing proposal and set-up a series of specific demos with the finalists. Bring in the company’s IT and integration teams to help evaluate the platforms.
• Schedule an additional demo with a POS/sales focus and another one to evaluate operational efficiencies.
• Determine API partnerships that can further enhance your team’s efficiencies beyond what the core software can execute on its own.
Even with all these steps, selecting an LOS provider is just the beginning. Indeed, the process is not an easy endeavor. But, OpenClose has made it a priority to make it easier for its customers to make the switch. We have addressed the two main concerns that companies have when switching LOS providers: cost-savings and efficiency improvements that enhance company profitability and margins. We point to the industry’s highest lender loyalty score rating as evidence that when a bank, credit union or mortgage lender switches to us, they are extraordinarily happy with the choice they made.
If you’re interested in learning more about industry-leading technology from OpenClose, be sure to book a discovery call or a demonstration here.