Corporate Profile – A Q&A with MortgageFlex Systems, Inc. -- September 2007 (Also appearing in the MBA Tech NewsLink)
Business-driven technology has been bantered around for years, and for years the ability to cost-effectively use technology to manage changing business processes and customer needs remained elusive. Without a clearly integrated technology platform and robust data standards and interchanges, meeting the needs of the business units was not only a capital intensive burden but one that significantly expanded the IT budget for on-going maintenance, support, and upgrades. Today, for lenders who are experiencing a steady increase in the costs to originate coupled with lower productivity per loan officer, investing in new solutions and technologies have not been a top priority in 2007 as the industry faces a material correction.
However, it is said that among chaos resides opportunity – if you just know where to look. I sat down with the leaders of MortgageFlex Systems, Inc. to discuss their new .NET 3.0 solution – LoanQuest .NET. To gain insight and understanding on the new imperatives being introduced with their business-driven technology solution, I spoke with Craig Bechtle, SVP, Product Development and Ted Morse, EVP, Sales and Marketing to examine what makes their solution different and compelling.
Dangelo: “What are the three key challenges facing the mortgage industry during the next 18 months and how can your organization mitigate these risks, while creating a collaborative operating arrangement with customers that is sustainable and able to change with business demands?”
Bechtle: “The three top issues are; 1) loan quality/new products; 2) cost containment and 3) expanding originations by growing a market or channel. Product development can support these issues with functionality and tools that allow the lender to adjust as the expectations of the market adjust. These are interrelated as they are all affected by the pressure to maximize profits. The drive for profits affects all of these issues and the tightening of loan quality standards will further strain the need to contain costs and open new origination channels.
For customers, a technology solution that is deployable across multiple platforms and is supported by industry standard rules and workflow engines will enable a lender to adapt to the changing landscape of originations as new channels are identified and prospected. Tightly integrated rules, workflow and integration points in a technology platform will allow a lender to take advantage of the growing number of third-party solutions that will permit them to adapt and grow as the market changes.”
Dangelo: “Why should customers or prospects place your firm at the top of their ‘short-lists’ when evaluating mortgage solutions?”
Bechtle: “Three reasons - cutting edge technology, 25+ years of adapting and growing a business, staying power. Many vendors have come and gone over the previous 20 years and MortgageFlex is still here. The solid, conservative, product driven approach has allowed us to survey the technology landscape and to select the appropriate technology when it is ready and not before. Our distinctive competency extends to a clear understanding of technology utilization, product focus and superior execution of new product features. Lastly, we have extensive experience in the mortgage industry and that allows us to project ourselves as we develop new features from the customer’s perspective.”
Morse: “When customers or prospects review mortgage solutions, we inevitably make the ‘short-list’. There are several reasons for this success. We stay tuned into the lending industry and all the key business drivers impacting their business. We also stay in touch with our customers to determine their current and future requirements. Our team believes that in addition to superior technology, that ultimately ‘People make the Difference.’ We remain focused that the customer comes first.”
Dangelo: “What are the top two lessons learned that your organization has experienced since the start of 2007 and how can mortgage decision makers take advantage of this experiential learning?”
Bechtle: “It appears that the decision makers are increasingly coming from the IT areas. Whether this is due to market conditions, (expanding insignificance of the GSE’s, growing influence of Wall Street firms and associated expanded product offerings) or just a phase, the development and deployment of a SDK with the origination product is a key component of the product offering and it is critical to the sale. We have learned the early adopters of innovative technology have more challenges and experience a greater percentage of failure relative to vendors that wait for the technology to stabilize.”
Dangelo: “With sophisticated technological offerings becoming more commonplace in the mortgage industry, what are the hidden barriers that organizations should prepare for and how can your company help them achieve a faster-time-to-market?”
Bechtle: “The primary barrier is in the selection of products from vendors who base their systems solely on technology. Functionality is still required to originate a mortgage and tool-kit systems do not allow a fast time-to-market. Products that require the lender to build functionality by using a toolkit are exclusive of the concept of quick time to market. Lenders still need to look for a product with a rich feature set that is delivered as a configurable product. The inclusion of an SDK will only enhance the product by allowing the lender to customize, as they need -- ‘customization as desired, not as a requirement.’”
Dangelo: “What advice can you offer firms struggling with ‘where to begin’ when considering adopting a BPO and software factory partner?”
Bechtle: “Examine the reasons for looking at a new system (what is the problem) and use that answer as a focus for your selection. Understand what business you are in, are you in the lending business or are you in the technology business? Tool-kit systems require more of your time and are more expensive to deploy, but you get a semi-custom system, tailored to your business needs. Shrink wrap software provides the fastest time-to-market, but typically provides little in the way of configuration or customization. Full-featured products that provide a complete, feature rich workflow combined with a rich SDK offer the best combination of features and customization capability. You can achieve quick time-to-market with extensive configuration and customization capability.
Furthermore, look at the vendor’s track record of deployments and their history of enhancements. Are they complimentary to your capabilities or do they leave the implementation up to you. All the while, remember what you are looking for, what problem are you trying to solve. If you are strong technically, a tool-kit product or, better yet, a full-featured product, will provide the best use of your investment of people and technology. A full-featured product will allow your technology staff to focus on true customizations as the basic functionality has already been built and delivered.”
Morse: “Check existing and current customer references. This provides invaluable insight into a vendor’s true business practices. Be prepared to address the ‘Change Management’ paradigm when converting to a new LOS or servicing system. Lenders often do not have standard documented procedures, back-office processing, loan officer training, and customer interaction across the distribution channels. Inconsistency becomes a problem during implementation in training long time employees embedded in the routine operation of their old legacy system and new inexperienced employees in the mortgage industry. It is imperative to get buy-in from all your line of business managers and ensure that the vendor provides comprehensive immersion training and support throughout the implementation. On-going vendor support will help guarantee a smooth transition and full utilization of all the software’s functionality.”
For 2008 MBA entries, click here