First California Mortgage Company: Transforming the Mortgage Loan Process Through Superior Technology Solutions

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1 First California Mortgage Company: Transforming the Mortgage Loan Process Through Superior Technology Solutions The Vision First California Mortgage Company (First Cal) is a mortgage banking company with a rich history dating back to Their wholesale lending division provides an extensive loan product selection to a network of mortgage brokers throughout California. The company prides itself on providing superior service to its customers and partners. Exadel Customer Case Study Financial Services Industry Web-based Electronic Loan Processing System The traditional wholesale mortgage industry could be described as an environmentalist s worst nightmare. It involves tremendous amounts of document writing and document pushing. Add to this a staff that is often armed with little but a ballpoint pen and a calculator and the human factor allows for multiple points of error. First Cal had a vision. The vision was to remove as much of the paper, pen and calculator bottleneck from the workflow as possible. If they could create a business rules engine that would contain all their product and pricing information and submit loan data electronically, the approval process would be shortened, and error rates would decrease. The Plan The company knew that creating the type of loan processing system they envisioned could have a dramatic effect on productivity however implementing it would be a challenge. First Cal runs a very lean development staff. In doing some analysis of the in-house resources versus their system requirements they quickly came to the conclusion that their vision could not be a reality without some help. They hired a new Project Manager to head up the project and sought the expertise of a company to whom they could outsource the development. They knew they needed a special partner for this project someone with more than just superior technical skill but also with a history of business domain expertise. These requirements led them to Exadel. First Cal would provide a project lead and a business lead to determine the specific needs and reactions of the proposed rules engine. On the Exadel side would be a global team of software developers led by a US based

2 development lead who also served as the primary point of contact for First Cal. Exadel recommended using open source technologies. While this was something that First Cal had no prior experience with it didn t take much to convince First Cal that open source would provide a budget benefit that was impossible to resist. Even so, there was some concern. Would open source be stable enough to use for such a strategic application? The Solution In April 2006 First Cal released the beta release of their electronic solution now known as FirstCal DealWorks. Today 64% of all their loans are processed using the new system, and this number is still growing. Having Deal Works in place means the broker can forget the pen and paper and instead use the electronic system to key in information about the loan and simply press a button doing so initiates the rules engine which in turn presents the broker with all the eligible products. Upon selecting the loan product of interest, the system then displays pricing information and options for selecting adjustments. This process, which was previously done manually using hard copy rate sheets and desk calculators, is now done quickly and painlessly. Brokers now electronically submit a standardized loan application form (1003) to start loan processing and perform preliminary underwriting and credit approval while they work on putting together the rest of the required loan documents. As more information is collected the brokers can enter all their information into the loan origination database, and submit these files. The time that would have been spent on data entry can now be used to run credit reports, process documents, etc. Pricing can be locked or floated with options to later lock the loan electronically upon demand. At the end of the underwriting process, a broker can initiate closing documents. Before the automated system a broker would need to fill out a form, send this in for processing and wait for a response. Today it takes only the push of a button. The appropriate contacts are automatically notified via e- mail so work can begin.

3 One part of the FirstCal DealWorks application allows brokers to easily monitor the status of all loans in the pipeline. The Result First Cal could not be more pleased with the results of the project. Exadel s experience and business domain expertise was evident throughout the entire process. Exadel s extensive history in working with other financial services firms like Mortgage.com, Bank of America, and Deutsche Bank, meant they need not be educated about financial terms and mortgage business requirements for First Cal instead they could be an active and responsive partner from the start.

4 Here is the public-facing point-of-entry for the DealWorks application. The initial trepidation about the use of open source has completely dissipated; FirstCal learned firsthand that the technology used by Exadel is stable and solid at a core level. In fact it s so stable that the IT group has to schedule to restart servers because the system never goes down. In the words of their IT Director, I m continually impressed with its ability to run and run and run without any system errors You can t break it really. I m continually impressed with its ability to run and run and run without any system errors. You can t break it really. First Cal IT Director Of course the real proof is in the business advantages. Before DealWorks, First Cal employees would have to take an hour just to process the loan information, today the entire process takes twenty minutes. In fact the process is so efficient the company has positioned the solution so that loans submitted electronically are given preferred order status for processing. The main benefits include: Productivity increase by fivefold on loan setups Decreased error rates Improved communication / workflow Real time pricing and loan status reporting for customers Consistent and reliable service availability

5 Summary Together First Cal and Exadel were able to transform an inefficient paper loaded process into a seamless, easy-to-use, Web-based electronic loan processing system that demonstrates dramatic business benefits. Exadel s offshore approach to development provided a cost effective solution. The company is now able to market themselves as a firm that uses state-of-the-art technology and provides shorter turnaround times resulting in tremendous savings to their customers. Exadel is a leading developer of Web 2.0 business applications and software development tools and environments. Exadel s broad business expertise encompasses banking and financial, mortgage, ERP, e-commerce, Contact Center, Inventory Management, and travel. Copyright 2007 K.D. Larkowski All Rights Reserved PLEASE DO NOT REPRODUCE