In response to a 10-year period from 2005 to 2015 that saw the cost per loan double for lenders while productivity dramatically declined, STRATMOR Group announced plans to launch an independent, standardized loan originating systems (LOS) comparison in 2017.
STRATMOR invites interested lenders to participate in the development of the standardized LOS comparison. The new comparison will define criteria for testing how subject LOS-solutions (including a lender’s incumbent system) will perform in specific loan production scenarios, which allows for an “apples to apples” comparison between LOS solutions.
In the new comparison, three to four key task completion scenarios will be designated for each of approximately a dozen functional stages of the mortgage origination sales and fulfillment loan lifecycle. Each of the scenarios will be subjected to rigorous time and motion measurements along with tightly scripted system configuration and test loan variables.
STRATMOR will also apply normalized industry benchmarking data, thus allowing lenders to adjust for variances in relevant labor market data.
“We know that this sort of comparison will require the participation of the lender community, and we invite all interested parties to contact us for details on taking part,” said Senior Partner Len Tichy, head of STRATMOR’s IT and Operations Advisory Services. “We also know that applying this type of comparison would be impossible without the willing cooperation of the LOS providers themselves, so we look forward to engaging with the vendors on this project as well.”
Tichy notes that the need for such a standardized comparison is pressing.
“Unfortunately, there are just too many variables in individual business environments for us—or anyone else for that matter—to offer credible evidence that one LOS is outperforming another,” Tichy said. “While we can help calculate total cost of ownership, without some sort of useful, credible, readily repeatable method for comparing LOS ROI across vastly different lender environments, true ROI is frustratingly unmeasurable. So we’re aiming to change all of that with our ‘LOS Performance Shootout Methodology.’”