Get Ready to Rumble: The Fight for Transaction Control
You don't have to study the dynamics of interpersonal relations to know that more parties involved in a transaction leads to more friction in the process as the various players try to exert influence to further their own interests. That's just basic human nature. The real estate transaction could be the poster child for disfunctional group dynamics. And that's under the best of circumstances.
Writing for October Research Corp.'s RETI pub, I was often visiting with executives from the real estate sales side of the equation that were convinced that they -- and they alone -- should be in control. The mortgage was just another settlement service to them. Naturally, the mortgage lending, settlement services and technology executives I know have a different opinion. Since nothing happens without money, they consider the financing central to the transaction.
Others out there are starting to come around to the customer-centric view that has become so popular in other industries. While I agree that the day will come when the borrower/homebuyer will go to the Web and control everything, that day is a long way off. People that can buy a book about boating on Amazon.com or a bow cover for their Bayliner on eBay still find it far more difficult to negotiate our waters. The battle between the industry and the individual will be fought in the future.
But fight fans don't have to wait. There's a battle going on right now in the mortgage technology arena over what software should control the transaction.
"In the last issue of this newsletter the columnist pointed toward middleware as the answer to the mortgage industry's problem with disconnectivity between systems, likening middleware to the conductor of a symphony - the musicians in the symphony being mortgage industry service providers. In this model, the LOS gets equal playtime with everything else. This couldn't be further from the truth."
Talk about a shot across the bow! Hammond was referring to a recent article penned by an executive from WellFound Decade.
Now, I've written quite a few positive things about the technologies offered by both of these firms. Dynatek's Plug-In technology was really SOA before its time. This technology is integrated into its MORvision loan origination system (LOS). The company recently reported doing over 1 million Plug-In-enabled transactions.
The recently merged WellFound Decade team has combined a proven integration firm with an SOA framework the company calls the Mortgage Integration Foundation, a sort of middle layer between the lender and all the other services required to close the loan, including the LOS.
The lender will have to decide what the core origination technology actually is. My take (FWIW): as long as we're just thinking about originating mortgage loans, it will be tough to replace the LOS as the primary tool. But if someone could show how a single "master integration and management tool" could serve as a central SOA hub for originating a menu of mortgage products as well as handling other corporate transactions (such as human resource and benefits administration or facility management, for instance), then we'd be seeing a tool of the future.
For now, the battle rages on.