Residential Magazine

APIs Are the Software Titans of the Mortgage Industry

Application programming interfaces, or APIs, can offer originators greater business leverage

By Susan Graham

Although it’s been more than a decade since the U.S. mortgage crisis first began, new rules and regulations continue to emerge within the mortgage industry. As a direct result, navigating the lending and servicing space has become trickier. Growing investor and borrower demands and heightened regulatory pressure require more staff time and attention.

Now, more than ever, financial institutions face a common challenge in terms of lack of time and resources. Hiring additional employees isn’t always an option because of budget constraints. By taking full advantage of mortgage software, however, lenders, servicers and mortgage originators can increase efficiency and successfully navigate the latest industry changes without adding staff.

One of the best ways to increase efficiency, thereby saving time and money, is to implement mortgage software equipped with application programming interfaces, or APIs. An API is a software-to-software interface that enables applications to easily communicate back and forth without the need for user awareness or intervention.

APIs can be used internally specifically for a given company or organization, or externally and made available to any and all parties interested in developing an interface or connection to their product or service. APIs also can differ in functionality, which increases their usefulness across a broad range of areas.

Leveraging multiple solutions

Sometimes it’s easier to use an API than to develop new functionality from the ground up. An API may be developed to query data or update a database, initiate a process or provide additional functionality to a software application, for example.

By utilizing available APIs, mortgage companies are able to leverage multiple solutions to achieve the specific functionality desired and create a centralized database. Furthermore, APIs enable mortgage originators to use different platforms to take advantage of the functionality that can most effectively and comprehensively meet their unique needs.

“ Increased automation provided by APIs improves the lending experience for borrowers as well as mortgage professionals. ”

APIs let mortgage professionals seamlessly order fulfillment services from various service providers or share data across platforms. This allows users to remain in one system to provide support to their customers. APIs offer several important benefits to lenders, servicers, originators and borrowers, including improved efficiency, data quality, compliance and user experience.

Efficiency through automation

One of the biggest benefits of utilizing APIs is the workflow-automation they provide. APIs support integrations between software programs, allowing mortgage professionals to create a comprehensive technological ecosystem that supports automatic communication between systems.

Increased automation provides a wealth of benefits, including fewer errors, reduced staff hours and monetary costs, and more seamless operations. An API, for example, can link scheduling software to servicing- software schedules and automate end-of-day and end-of-month tasks, preventing servicing staff from having to run the jobs after business hours and on weekends. In addition to saving time, the API reduces mistakes caused by human error and can provide borrowers with quicker updated access to statements and loan information on the consumer-facing website.

APIs also can query data and/or update a database when processing a loan application. In the past, to determine loan eligibility, lenders had to pull information, such as borrower credit scores and liabilities, manually. Now, by using an API, lenders can integrate their online portal or loan origination system (LOS) with credit agencies to determine loan eligibility almost instantaneously.

Improving data quality

APIs also can provide further automation for specific programs. By openly sharing information between platforms, such as servicing and loan-origination software, an API eliminates the need for data to be manually migrated. With reduced human intervention, data consistency and accuracy increase dramatically, improving the data-management process.

In addition, the API determines how data is shared, ensuring full compatibility, whereas separate systems may result in data that is incompatible. Going a step further, APIs can even allow real-time access to specific data within another system, even if that data is not physically stored in the other system.

A financial institution that stores data in their core system, for example, may utilize a separate software system to service their mortgage loans. Even though these loans are being serviced on another system, the tellers and call-center reps can provide real time information and process payments directly from the servicing system.

If the LOS, borrowers’ and loan originators’ online portals leverage internal APIs, then originators can more easily support borrowers during the loan-application process, providing real time access to documents and the status of their loan application and allowing borrowers to upload supporting documents all the way to closing. Additionally, the data from the mortgage application can be automatically imported into the separate platforms, eliminating the need to manually re-enter the information.

Facilitating compliance

Regulatory compliance remains one of the leading challenges within the mortgage industry today. Luckily, APIs can facilitate compliance with changing regulatory requirements.

APIs can be used to efficiently execute programs and transmit data or collect additional required data, in accordance with your various reporting requirements. APIs further support compliance by scheduling various tasks to ensure that programs adhere to a certain order and criteria and are run on specific dates to meet deadlines.

Through integration between LOS and servicing software, the servicer and the originator benefit by being able to easily access current and historical information across systems. This capability is essential for organizations whether they retain servicing or outsource it.

Enhancing the experience

Increased automation provided by APIs improves the lending experience for borrowers as well as mortgage professionals. Today’s borrowers desire transactions that are as quick and convenient as possible.

By utilizing APIs, lenders and servicers can expedite their processes and eliminate much manual labor, allowing them to more quickly and accurately deliver loan information to borrowers. Instead of waiting up to 24 hours to see changes reflected in their online banking application or servicing portal, for example, borrowers would be able to receive real-time loan-status updates and access to statements and disclosures.

APIs allow for the exchange of data and execution of programs between applications. On the servicing side, borrowers gain immediate, real-time access to their specific loan data and statements and can conveniently make online payments 24/7.

API benefits test

Most mortgage professionals will benefit from implementing APIs because they can help them more easily build on existing functionality and automate processes to create custom solutions without the need to switch or upgrade platforms. To see if APIs may be right for your business, answer the following basic questions:

  • Are there any repetitive tasks that my team and I have to take care of every day?
  • Is there information I’d like to share with my customers that isn’t accessible in real time today?
  • Is there any additional functionality or workflow we’d like to add to one of the applications we’re currently using?
  • Would I like to use automation to give my staff more time to better serve the customer?

If a lender, servicer or originator answered “yes” to any of the above questions, the institution would likely benefit from an API. Ultimately, APIs can provide significant benefits, both internally and externally, for mortgage professionals and borrowers.

• • •

The key to is to leverage technology changes available to the mortgage industry by choosing software systems that work together seamlessly. The end result is a much more efficient and enhanced process for lenders, servicers, originators and their borrowers alike.


  • Susan Graham

    Susan Graham is president and chief operating officer of Financial Industry Computer Systems Inc. (FICS), a mortgage-software company specializing in cost-effective mortgage loan origination, residential mortgage-servicing and commercial mortgage-servicing software for mortgage lenders, banks and credit unions. FICS’ software solutions use Microsoft .NET Framework and provide customers the flexibility to choose an in-house or cloud-hosting solution. FICS also provides document-management and web-based capabilities in its full suite of products.

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