Written by Ken Hignett, as originally published in The Reverse Review.

We have spent a great deal of time and energy in the loan origination and settlement services industry discussing the benefits of the application of technology, particularly real-time integrations. We take these terms for granted, and we each have a unique understanding of what they mean. I think that we all run the risk of forgetting that all of the work involved in the loan origination and settlement services is performed by humans, not machines. This means that what we are really talking about when we use the terms “technology” and “system-to-system integration” is giving people exactly the data they need, when they need it. It’s about providing them with the tools to take the appropriate action regarding that data. This is effective technology that improves both the speed and reliability of the process by supporting the activities of people.

In keeping with our definition of effective integration, all processes should encompass the movement of both data and documents between systems. If our people are truly going to have exactly the actionable data they need, and also the tools with which to take appropriate action, our integrations must involve properly tagged and identified data flowing in real time in both directions between systems. In addition, our people must be able to access the electronic versions of all documents required to close a file. Whether the document is a payoff demand, lien release or something else, the document must be present even though the data is what we really use. While it is certainly necessary to examine the document for validity, if the corresponding data is present, it can be included in the process with a button click and it will always be correct. In short, if data exists electronically, it should be incorporated. For example, when a payoff demand is obtained, the data should appear in HUD’s system and the lender’s loan origination system at the same time and without any effort on the part of our people.

Virtually all current loan origination systems work on a relational database (if yours doesn’t, it’s time to look for an update) and the settlement service provider’s system should likewise sit on a relational database. This allows all data to be identified by a loan number, order number, borrower name, property address, etc., which facilitates the easy and accurate transfer of data between systems. If the integration is configured properly, this also means that the appropriate user in each system is notified immediately of any changes in the data and can take appropriate action, including using the data feed to display and examine the related document. Another good example of effective integration is the processing of the lender’s closing instructions. There is a document involved here, but if we want fast and accurate preparation for the closing, the related data should flow directly from the lender’s system to the settlement service provider’s system for inclusion in the closing statement and related documents.

When you look at the total loan origination process, it is clear that people make the transaction work, but effective use of the data allows them to work faster and more accurately, creating a smoother and more reliable experience for the borrower.