Credit unions that want to remain competitive in housing financeover the next decade will likely have to confront the issue of howto add technology to their mortgage loan origination systems.

Mortgage issuers use loan origination systems to manage the loanprocess from the initial taking of the application through to theclosing of the loan.

“In general the industry has moved the application process tothe Internet very well,” said Robert Dorsa, president of theAmerican Credit Union Mortgage Association. “Remember thestereotype of the member being able to apply for a mortgage fromhis kitchen at 3:00 [in the morning]? Where there has not been asmuch progress has been in the middle of the process, the work ofcollecting and verifying documents and all the other work ofunderwriting which has not moved online as quickly.”

Dorsa and other executives cite several industry and technicaltrends which are helping push the change.

First, there is a degree of technical inertia. Steadily, moreprocesses across all industries are tending to move online to takeadvantage of improved finance and greater convenience. Technologychanges to the mortgage industry are a just part of that trend.

Second, as seen in in other sectors, consumers have begun todemand improved technology when getting a mortgage aswell.

The familiar process of having members fax or otherwise deliverdocuments to their credit union’s loan officer over a period ofdays or weeks is no longer acceptable to many consumers, Dorsaobserved. As a result, credit unions will need to upgrade theirtechnology to continue to be thought of as serious mortgageproviders.

In addition, competitors such as Quicken Loans have largely madethis shift and have begun to advertise the speed and relative easeof the mortgage issuing process – a process which many consumershave said they dislike and believe takes too long.

But once a credit union decided to upgrade its mortgage issuingtechnology, what’s the best way to do it? Essentially, there aretwo options, some leaders say. A credit union could keep theprocess in house with a loan origination system such as thatoffered by MortgageBotor Prime Alliance or, if they want to outsource the process, theycould partner with for profit firm or mortgage issuing CUSO.

“Each of the approaches has its advantages and disadvantages,”Dorsa observed. “A lot depends on how much the credit unionwants to put into and control the process but each approach can dothe job,” he added.

Dan Green, executive vice president for credit union solutionsfor Prime Alliance, also thinks credit unions should remember thefundamentals of what attracts members even as they seek to updatetheir technological ability.

Even though Prime Alliance offers a technology option, Greenpointed out that just having the best technology is not going to beenough. Credit unions' reputations as secure, local and well-knowninstitutions are what will initially draw members to their mortgageoptions, not the credit union’s level of technology. A credit unionjust needs to have enough technology to meet member expectations,Green observed, but it shouldn't have so little that it turnsmembers away.

Adopting a loan origination system can help a credit union moreeffectively manage the regulatory burden that comes with mortgageissuing, Green said. Using a LOS can help credit unions standardizetheir regulatory compliance in a way that it might not be able todo without one, he added.

Matt Cotter, senior vice president of sales for MortgageBotlargely agreed, particularly with the impact a good LOS can have ona credit union's regulatory compliance and on the percentage ofmortgage loans that makes it through the process from the point oftaking to the application to the closing.

Loan origination systems have been on Cotter's mind a good dealduring the past few weeks. MortgageBot is owned by Davis andHenderson Corp., a Canadian financial services technology companyheadquartered in Toronto, Ontario, and D+H’s purchase of Avista Solutions Inc., a Charleston, S.C.-based firm which providedLOS software.

This means that MortgageBot has begun working with Avista tointegrate the two firms’ systems to be able to provide a seamlessmortgage origination process, Cotter explained, something that D+HCEO Gerrard Smith highlighted when the his firm bought Avista.

“With Avista, we’ve added an innovative, fast growing LOSbusiness featuring proven capabilities that are highly synergisticto those we offer through Mortgagebot,” Smith said when thepurchase was announced. “Together, we now support the entiremortgage origination process for U.S. lenders and provide customerswith a comprehensive suite of products that enable efficient,effective growth from origination through to closing.”

At the bottom line, Dorsa and the executives agreed that theadvance of technology has meant that credit unions have morecapability to compete with larger mortgage issuers than they everhave before, but credit unions will have to deploy that technologyor partner with a firm that will do so in order to take advantageof it.

A new applicationfor the iPad promises to help mortgage issuing credit unionsfurther speed up and streamline their mortgage loan originationprocess as a likely way to be more competitive.

The new features are an upgrade to LenderMobile+, the existingapplication offered by LenderMobile, a lending technology companyheadquartered in Burlingame, Calif.

A new imaging feature lets loan originators and borrowers takephotos of documents with the iPad camera and add the images to loanfiles through cloud computing technology, the company said. In addition, the new loan notes feature lets users add notes to aloan file directly from their iPad.

The new feature will allow loan originators to take photos ofkey documents such as W-2 forms, tax returns, pay stubs and driverslicenses from anywhere and then add the image to the borrower'sloan application which is resident on the credit union’s loanorigination system. The new feature also allows the loanoriginator to cancel an image and re-take it if they don't like thefirst one.

Once added to a loan file on an iPad, the document photos in theLenderMobile+ app are then validated and processed in theLenderMobile computing cloud and can be sent to a lender’s LOS.With the app’s photo feature there is no need to scan, email or faxdocuments, the company noted.

The new LenderMobile+ loan notes feature enables loanoriginators to add notes to individual loan files. A loan notesform is available on the screen for each loan file where users cantype and save their notes in a free form text.

“We’re making our iPad app more useful to users when originatingmortgages,” said Iavor Boyanov, chief technology officer andco-founder of LenderMobile. “The new document photo feature isgreat for loan agents on the go who need copies of borrower loaninformation quickly to avoid any processing delays. And more andmore loan agents requested the ability to write and add notes forparticular loan files from their iPads, and we delivered.”