Why mortgage lenders should use a loan management system

The abundance of savings and rise in remote work that was spurred on by the global pandemic has generated a demand surge in property markets. While the pandemic appears to be abating, interest in purchasing property isn’t slowing down anytime soon, and has even reached pre-pandemic levels. If your company is involved in the mortgage lending business, you should definitely be using a loan management system (LMS) to help take on the influx of customers entering this booming market.

“Banks still service most of the mortgage market across Europe and in the UK, but this is steadily changing as more non-bank lenders enter the market and disrupt the status quo,” says M&G Investments Head of Specialty Finance Jerome Henrion. Whether you’re a bank, lending company or fintech, InGain has extensive experience in providing LMS solutions for mortgage lenders.

What is a loan management system?

An LMS is a lending solution that facilitates end-to-end lending processes for both online and offline operations. A full lending lifecycle management system enables lending processes to be fully automated, from customer onboarding through to loan origination, loan servicing, collateral management, warnings and debt collection.

The loan origination process covers everything up to your company issuing a mortgage loan. The processes will be customised to fit your business model, and can be adapted to cover a broad variety of mortgage lending products.

Mortgage lending LMS product features

Keep your company’s future expansion in mind and choose a loan management solution that can facilitate a broad variety of mortgage loans. An LMS should allow you to easily develop a new product from a catalogue. Depending on the chosen product, you should be able to adjust terms and calculation methods based on interest rate, commission, penalties & grace period, early repayment policy, etc. Here are the mortgage lending product features you should expect your LMS to cover:

1. Acquisition

A good LMS will enable your company to acquire new customers through both online and point-of-service mortgage brokers. The customers your company attracts through brokers and affiliates can then be streamlined into a white label website and mobile application for further onboarding. Make sure any LMS solution you choose also has a self-service portal that’s connected to the website and app via an API connection.

2. Calculations

An LMS should support all of the most common methods for calculating instalment. This includes commission, as well as extra payments. Offer generation modules can provide easy loan scheduling opportunities for individual risk-based offer provision to the customers.

3. Approval

One of the biggest timesavers an LMS solution can provide a mortgage lending company is ensured by a built-in, multi-level loan approval process. A process that can normally take an employee anywhere from a few hours to a few days, can now be completed in just minutes.

4. Collateral

An LMS should support secured loans and collateral management, for example, property backed mortgages or corporate loans. Collateral management is an important part of loan servicing, and the solution should support various forms of collateral management. This includes valuation information, revaluation reminders, property insurance information and insurance renewal reminders.

Choose an LMS that also includes the option to connect to any necessary third party registers, such as property registry etc. The system should also enable employees to be able to easily create tasks related to all aspects of collateral management within the solution.

5. Guarantor

In some cases you may need to include a co-loan applicant or guarantor in your mortgage loan contract. An LMS can support onboarding, verification and scoring in these cases.

6. Additional features

Some additional features you may want to look for when choosing an LMS for your mortgage lending needs include the option to process both retail and business customers, which involve the onboarding of multiple business representatives. Another important system feature is the option to connect to third party data vendors, e.g. credit bureaus, which allow a streamlined data flow into scorecards and the decision engine.

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For over 10 years InGain has been supporting the consumer finance industry, fintech companies, and banks with an out-of-the box, yet fully customisable loan management system. On top of the core system, the company also delivers system integration services and custom feature development. InGain has executed hundreds of projects with more than 50 global clients across a variety of sectors.

The loan management system caters to both secured and unsecured business and retail loans, including instalment loans, auto leasing, mortgages, line of credit, buy-now-pay-later, payday loans, invoice factoring and more.