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New Technology Trims Loan Origination Costs

How much efficiency and workflow improvement can a bank gain by replacing its loan origination system? For Torrington Savings Bank in Connecticut and Natick Federal Savings Bank in Massachusetts, the answer is “a great deal.”

“Our new loan origination system has dramatically improved our level of service to our borrowers,” said Jeffrey Geddes, Senior Vice President at Torrington Savings Bank. “Next generation technology has given us more customization, a more versatile document archive, automated back-up, and secure remote access for our lenders at a substantially lower cost. It has certainly made our staff more efficient.”

The money-saving technology is a hosted or SaaS (Software as a Service) version of the bank’s loan origination system rather than the traditional in-house installation. RemoteLender™, a hosted version of PowerLender™, eliminates a variety of costs to the bank. These include hardware and software, system administration personnel to run, update, and customize the system, plus backup for disaster recovery.

“We felt from the beginning that a hosted origination system would meet our goals of a modest up-front investment and manageable ongoing costs,” said Mr. Geddes. “Also, the hosted environment assured us that the system could grow as we do.”

Mr. Geddes praised the system’s document archive, which enables staff to access credit reports, flood certifications, scanned tax returns, and appraisals at the click of a mouse. He also spoke highly of custom processing ‘stages’ with unique drop-down menus and data entry screens to reduce processing time. Based on tables, the screens drive the bank’s pricing engine and eligibility process, another factor that improves customer service and drives down cost.

Helen DeCosta, Senior Vice President at Natick Federal Savings Bank, also appreciates the power and flexibility of the RemoteLender system without the headaches of maintaining it in-house.

“The idea of having somebody else install, refine, and support the system for us is very attractive,” said Ms. DeCosta. “RemoteLender enabled us to use the features of the Power Lender software and have somebody else take care of it. The timing was perfect. With all the new regulations, we are getting expert support when we need it most.”

Both bankers say that the most important success factor for RemoteLender is local support. Most loan origination systems are highly-customized, making support through the setup and training processes essential. “Having an expert team working right alongside the lending staff is invaluable,” said Mr. Geddes. “Especially when you consider that mortgage loans are not exactly cookie cutter.”

That team turned out to be Specialized Data Systems (www.specializeddata.com), a Connecticut-based company that has worked closely with core processor COCC for decades. COCC provides next generation technology services for both banks. Mr. Geddes said his team had reviewed several loan origination systems, and was most impressed with RemoteLender. Torrington Savings Bank recently won the 2010 Innovative Leader Award by Mortgage Technology Magazine for the installation.

During Mr. Geddes’ video acceptance speech when he received the Award, he said, “RemoteLender afforded Torrington Savings Bank the ability to achieve the same level of technology as our national competitors.”

“Here at Torrington Savings Bank, our resources are rather limited, and the customization and deployment of RemoteLender was a substantial undertaking,” Mr. Geddes continued. “If I have any advice to other lenders contemplating a new origination system, it is to get great support and make testing of unusual application scenarios a priority. Non-vanilla applications are the ones you will process the first week you go live.”