Residential Magazine

Take Charge of Your Data

Functionality and security are keys for choosing the right software vendor

By Susan Graham

Mortgage lenders and originators have several options for housing their loan data — including an on-premises server, self-managed cloud hosting and multitenant cloud hosting. When choosing a vendor, mortgage professionals must consider whether the vendor allows them to decide where to house the software and data.

Mortgage professionals should pay attention to how data is stored and shared, as it may impact their ability to access it, and it also may create security concerns. A key consideration in choosing a vendor is who owns the data and the extent to which the software solution allows them to control or access it. Having access to mortgage data is essential for full functionality and flexibility in the loan origination process.

Data-access needs

First, mortgage professionals may have ad hoc reporting needs. Generating custom reports requires the ability to retrieve and format data. Financial institutions may want to create consistently formatted reports across business units, or reports that contain specific data that is not readily available on canned reports.

Without direct data access, mortgage professionals must depend on their loan origination system or servicing vendor to generate custom reports. These standard system reports, however, may not be in a file format that allows for convenient customization and standardization across multiple platforms. Integration with other systems is important. Seamless data flow, both into and out of a mortgage company, is critical to creating a high-efficiency enterprise. Without full data access, integration options may be limited or nonexistent.

Data portability is another issue to consider. Having full access makes it easier to migrate data to another vendor, and it allows lenders and originators to change software vendors if their provider goes out of business, if the provider generally restricts access, or if the mortgage professional’s needs change. Without full data access — both within the software and from the database external to the software application — you may get locked into staying with a vendor because it’s difficult or (in some cases) impossible to retrieve your data for prospect-conversion purposes. More importantly, your business could dry up if a vendor unexpectedly restricts access to your mortgage data. 

When data is hosted in an on-premises server, for example, a mortgage company’s information-technology (IT) staff directly controls access to data, and has firsthand knowledge of the protocols and security their company has placed on internal-network security. Lenders and originators can confidently access data when they need it, without restrictions.

Finally, there are questions to ask with regard to disaster recovery. Many mortgage professionals may not be aware of the logistics of their disaster-recovery plan when using an external cloud solution. You should know how often full and partial loan-data backups are performed, as well as where these backups are stored. Some cloud-storage providers have backup servers that are located outside the U.S., so there are different laws and regulations that apply to them. When selecting a software vendor, you should ask whether you’ll be able to choose where your backup data is stored.

Software and storage options

An in-house server and self-managed environment is a solution that allows mortgage professionals to maintain full control of their data and its security features. Software that runs on in-house servers typically uses open, relational databases that allows full access to data — as well as the ability to connect with a multitude of external software applications that can extract the data directly from the database.   

If a lender or originator chooses not to house their mortgage software or data on site, however, cloud hosting can be an effective alternative. If a software solution has an open database that provides full access for a mortgage company, it should choose a cloud-hosting provider that supports that access. One of the primary advantages of storing software and data in the cloud is remote accessibility. Users can access the software from any computer or mobile device, anywhere there’s internet access. Users don’t have to be tied to their desks, so they can work efficiently even when they’re on the go.

Furthermore, using a cloud-hosting provider allows mortgage companies to save money on hardware purchases and by eliminating or reducing in-house IT staff. When software is housed on an in-house server, mortgage companies need qualified IT staff to install, configure, maintain and back up the system. Research and advisory company Gartner estimated that at least 80% of a company’s IT resources are spent on maintenance of hardware and software. Many cloud-based hosts offer system-maintenance and security-management activities as part of their services. System maintenance, including software enhancement and regulatory updates, can be done automatically, freeing IT staff to focus on other tasks.

Although there are benefits to using a cloud-hosting provider, the convenience and monetary savings may come at a cost. With some providers, access to data may be severely restricted or prohibited entirely. This also is the case when a vendor’s software architecture is a multitenant environment. In a multitenant public cloud, a company’s websites and applications are hosted on the same servers as those of other consumers. In these cases, it’s critical to understand how the provider ensures security and performance.

Multitenant applications typically restrict external access to data, so mortgage professionals are at the mercy of their vendor, who decides which data customers may access from within the application. If mortgage professionals need specific data that is not already available in a canned report, or if the report is limited to a specific format that isn’t readily usable, they must rely on their vendor to enhance the software and allow access to the desired data.

Vendors may not share your sense of urgency regarding data-extraction requests, so mortgage companies may find themselves waiting weeks, months or even longer to receive their data. Furthermore, obtaining that data may be expensive, if the vendor charges more to accommodate a customized extraction request.

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When mortgage professionals choose software and/or hosting providers, it’s important to consider where the software and associated data will be stored, as well as the extent to which they can control and access the data. You need to identify your reporting requirements, integration preferences and other business processes so you can access mortgage data and complete these essential tasks quickly and efficiently.

Some web-application sites may severely restrict a mortgage company’s access to data. If your company chooses not to store its data in an in-house server, it can maintain control over its data by choosing a software vendor that uses an open database and a cloud- hosting provider that supports access. 


  • 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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