Broker course mortgage online

Reconstructing IT for 40,000 Mortgage Brokers

As mortgage rates sank to an all-time low last year, 11-year-old Accredited Home Lenders Inc., which services an aggregate customer base of about 40,000 mortgage brokers, found itself a victim of its own success. The unprecedented expansion the company was experiencing revealed a rickety technical foundation—one riddled with unreliable point-to-point interfaces, a heavy reliance on paper, multiple instances of data re-entry and no automated process management.

Compounding the situation was the gaggle of homegrown systems the company had patched together that allowed for little communication internally or externally with brokers, investors and borrowers.

To fix the problem, San Diego-based AHL drafted a blueprint for a technology reconstruction that would improve communications with suppliers and provide more efficient services to customers.

AHL—which sold $1.6 billion in loans during the third quarter of last year, an 89 percent increase over the same quarter in 2002—wanted to dramatically streamline its workflows and simplify access to information, including automating its pipeline reporting, prequalification, application submission, underwriting decisions, loan funding and loan servicing.

After doing preliminary research to determine what kind of technology and services it might consider, AHL turned to WellFound Technology Inc., an Atlanta-based systems integrator that specializes in insurance-industry implementations.

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"We were building a business infrastructure that we needed to be robust enough to communicate to the broker community, and we needed a technology package integrated to our existing system that would allow that," said Jim Pathman, CIO of AHL.

With that construct in mind, WellFound sat down for an initial assessment with AHL and worked out a "current state" and "future state plan" to determine the course of action.

"They had built a lot of homegrown systems," said Paul Gain, WellFound's CEO. "Nothing at all talked to each other. It was pretty classic. At the time, one of their senior executives had a vision that they're a bigger company now—they want to go public—and they want to handle things in an event-driven fashion, with the core of that business process management and [driving] information through the enterprise."

Working with WellFound, AHL developed a blueprint for an infrastructure that enables standards-based business-to-business communication. WellFound also helped AHL determine which technology providers to work with.

At the heart of the system is a multichannel customer portal from BEA Systems Inc. that models AHL's mortgage process, from origination through servicing of accounts, to help mortgage brokers as they sell residential (nonprime) mortgage loans. AHL and WellFound also implemented BEA's WebLogic Platform 8.1 infrastructure platform to enable AHL to access its critical back-end systems, including those dealing with loan origination, automated underwriting data warehousing, credit search and title search.

The business integration and process management layer is WebLogic Integration, the development platform is WebLogic Workshop and Web services is managed by Blue Titan Software Inc.'s Network Director.

"Our mandate from AHL was: 'We can't afford to rewrite all these systems, and we can't afford to unplug, either,'" said WellFound's Gain. "So we had that as our given. We recommended 8.1, and it was still in beta. But we were very confident with where [BEA] was going. Our next challenge was keeping in our audience people who didn't even know how to spell Java [AHL is a Microsoft Corp. shop]. ... We wanted to leverage the whole Web services [movement] with XML."

What WellFound brought to the table was mortgage experience and expertise in enterprise transactions. It also had expertise in B2B transactions, according to Mike McCoy, director of enterprise architecture at AHL.

WellFound also brought its Mortgage Integration Framework, which uses standards-based software components and concepts—including XML and Web services—to integrate disparate systems. The framework enabled AHL to automate workflows internally and provide continuous event-driven notification to brokers throughout the lending life cycle.

One core component of the framework is a CDR (common data representation) that uses BEA's transformation engine. WellFound, however, configured the CDR so that the transformation engine complies with Mortgage Industry Standards Maintenance Organization, or MISMO, standards.

With MISMO natively in the architecture, AHL will be able to electronically trade information with its broker community through a simple portal interface.

Next Page: Keeping up with standards.

At the same time, WellFound is represented on the MISMO board and keeps its software up-to-date with emerging standards. In addition, a committee within MISMO is replacing the old standard with an XML-compliant version, something AHL is looking forward to using.

"As part of the framework, the schemas we use internally are normalized to MISMO," said McCoy. "Then, when we get a business partner [communicating electronically], we don't have to go through any transformation with them. WellFound does that uniquely; some other [systems integrators] don't sit on that committee" that ensures MISMO standards are up-to-date, he said.

AHL has completed Phase 1 of the architecture implementation, dubbed the Total Customer Experience project, which called for training the company's 1,400 employees on the TCE portal. Phase 2, slated to take place this year and next, will look to bring the broker community online with the portal.

The TCE portal infrastructure models AHL's mortgage process, from loan origination through servicing accounts.

In addition to automating AHL's workflow and providing an event-driven notification system, the TCE online system is an open, standards-based infrastructure that enables AHL to work across channels, including its call centers and the Web. At the same time, BEA's 8.1 platform allows AHL's developers to continue to build and deploy .Net applications—the company's preferred development environment.

"At the end of the day, anyone can build stuff," said WellFound's Gain. "There are a lot of smart people out there. But AHL has a custom system with custom maintenance. ... With the Mortgage Information Framework, modules are prebuilt and preintegrated toward the mortgage industry. So AHL doesn't have to spend a lot of time writing integrations."

AHL has a number of objectives in mind for TCE, including reduced processing costs, shorter decision-making times based on automated underwriting, reduced development and integration costs, greater processing capacity, and more participation and loyalty from its broker community.

"We hit budget, we hit our time frames and we're in production," the key goals for Phase 1, said AHL's Pathman.

When the portal is rolled out to brokers in Phase 2, AHL is also expecting time and cost savings.

"It will give brokers visibility into the status on loans they've submitted to AHL versus them making calls into [our office]," said McCoy. "They can actually subscribe to information based on the loans they've submitted and receive e-mails throughout the process on loans in process or funded. Basically, they can subscribe to how much information they want to see or subscribe to events they want to see."

AHL will provide the portal as a service to brokers, lowering costs and reducing the amount of phone time between account executives and brokers. With the portal, brokers can submit loans electronically.

"We've certainly got the technology into production and in such a way that we've been able to roll out the portal internally," said Pathman. "Because of the style and look and feel, information is just a click away ... and we've been able to roll out access to technology to all our sites in the U.S. in a lightweight fashion. And we've increased the flow of information to the field."