April, 2012

TheMReport — News and strategies for the evolving mortgage marketplace.

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Page 32 of 82

FEATURE volume. The pay-as-you-go model is the underlying theme of virtu- alization and cloud services. But all cloud and virtualiza- tion deployments are not the same, says Martin Williams, CEO of Acris Technology, Laguna Hills, California. Several experts recommend closely examining what is and is not included in any such agreements; otherwise, these deployments might be much more expensive than expected. Other Considerations D om Marchetti, EVP with Blueberry Systems in Greenwood Village, Colorado, recommends that small lenders seek comprehensive technology 10-years-final.pdf solutions rather than taking the "best of breed" approach encom- passing several different solu- tions. "Those can leave you with overlaps or gaps in coverage. One of the biggest examples is someone who has an LOS ven- dor that maintains the data and a different documents vendor that are disconnected." Expected ROI and past perfor- mance of technologies may be ex- amined in the planning stage, but every lender's situation is differ- ent. So the results using the same technology may not be the same. Some vendors have recognized this and offer pricing models that are based on funded loans, as well as money-back guarantees for as long as six months. All costs are blended into the cost of a closed loan, says Alan Rabideau, CIO of 1 3/21/12 11:55 AM Residential Finance Corporation, in Columbus, Ohio. Conrad recommends seeking additional services from vendors, such as data retention and data storage, that they can provide at a lower cost than the lender could do on its own. Additionally, the nonintegrated solutions might seem to offer a positive ROI when considered on their own, but when the lack of integration with other products is factored in, some could prove to be a drain on resources, accord- ing to Daniel Jacobs, president of retail branching for Residential Finance. Others say that most technologies today offer fairly comprehensive integration capa- bilities with other systems. Any promised ROI should be "fairly immediate," Lynch adds. "There's no reason you should have to wait 18 months or two years." However, avoid the temptation to seek out the low- cost provider, advises Fairway's DeBroux. Such a strategy can cost more in the long run, especially if the low-cost vendor doesn't provide some of the ancillary services or ongoing support of some of the higher- priced competitors. Small and midsized lenders can have the necessary technology to compete effectively with their larger counterparts as long as they focus on their core business, use outsourcing, and avoid the sirens' call of the technologies that look or sound promising but are not essential to the operation of their core competencies. C M Y CM MY CY CMY K THE M REPORT | 31

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