Advanced APIs – The future’s so bright…
Integrations have always been a bear.
It used to be that getting all of the data into a single system to produce an accurate and compliant mortgage application was a labor intensive process. Each required service had its own method of providing lenders information (remember when we had credit bureau printers in the office?), and the re-keying of data was the norm. Credit vendors were one of the first to have integrations into the origination platform. Choices were few, due to the costs of creating these one-off interfaces.
With the emergence of DU and LP, service integrations started to expand. Depending on the lending platform and the service vendors, you might have a solution, or you might not. The bigger the LOS or solution provider, the better chances you had.
Then the Internet happened.
The Internet initially provided an alternative solution to limit the technical hurdles to direct integrations. The savvy providers created websites for ordering their particular product or service, and secure methods for delivery. The pertinent data was then manually input. It was better than it was, but the data input risks were still there, and your production staff had a Rolodex full of logins. Better, but…
The evolution of the Internet provided the catalyst to the sophistication of the integrations we require as lenders. The industry embraced the concept of data, security, and communication standards. The internet community provided the security and commutation standards, MISMO provided the essential data standards. The one missing piece was having a standard method for transacting data with the various lending platforms and services. Enter the Advanced Application Programming Interface (Advanced API).
Advanced APIs allow parties to securely transact data between different systems using the established data, security, and communication standards. The individual entity publishes the definitions on how to access, retrieve, and push data securely between their platform and others using a standard set of protocols.
This allows the developers to concentrate more on the business processes required, than on establishing the links between various platforms and services. This significantly drives down the costs of integrations, but also provides more opportunities to increase feature functionality across the spectrum.
One company that is seizing on this technology shift is Optimal Blue. Optimal Blue has always been known as a premier product, pricing and hedging solution, but over the past year there have been some exciting changes. Scott Happ is the new CEO at Optimal Blue, leads an extremely strong group of mortgage technology professionals.
Optimal Blue has leveraged the potential of advanced APIs and transformed their platform into a ‘Digital Loan Marketplace’. This has brought Lenders, Investors, and Providers all together on the same platform. The Lender and Investor pieces are what we would normally think of in what has historically been a secondary market platform. The expansion of Providers - thanks to this technology shift – is the game changer. Providers are not just the LOS vendors, but solutions such as POS vendors, lead generation solutions, and MI providers. Optimal Blue’s recent acquisition of Comergence, a leading provider of third party and social media compliance monitoring, brings a expanded level of available service offerings to the digital loan marketplace.
We have traditionally thought that the center of our lending technology environment is the LOS. We have designed and implemented our technology strategies around this concept. Optimal Blue’s Digital Loan Marketplace demonstrates that there are other models that have significant benefits for both the lender and the LOS vendor. The lender becomes member of a marketplace which with access to a vast array of products and services, and their loan data is securely available to whichever solution providers they choose – not just investors. The LOS vendor benefits by having the ability to limit the number of interfaces they need to support. Using an integration to Optimal Blue using advanced APIs provides the availability of a catalog of services via a single portal. The LOS vendor can then free up resources to concentrate on the multitude of other customer needs they have to address to stay compliant and competitive.
Getting data into out lending systems has come a long way from having to key and re-key every item. Interface have gone from scarce and costly to ubiquitous. Now, with the emergence of advanced API technology we have solutions where the LOS might not be the center of our lending technology environment. As the old song goes…
“The future’s so bright I gotta wear shades”.
Note: Stay tuned for our second annual Lending Technology Luncheon. Details will be released soon!
Please reach out if I can help at pbates@scapartnering.com.
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