The Cogent Road

Let’s hear it for the Three-Peat!

For the third straight year, Cogent Road has been named to the mortgage industries Top 50 Service Provider list.

Winning it this year means a lot to all of us because the past two years have been very, very difficult. The mortgage industry has been ripped apart – and reassembled inside-out. We’ve not only survived the turmoil, we’ve been able to:

• Roll out an incredible workflow and collaboration platform called Roohmz Mortgage.
• Invent a brand new way of keeping lender’s compliant – without human effort.
• Launch our AVAIL automated mortgage qualification tool
• implement a direct sales channel
• create a few strong partnerships with complementary vendors
• significantly increase the average size of our client
• and increased revenue.

And, in the next few months we will roll out an entirely new version of our Funding Suite credit reporting platform. We will bring to the credit reporting industry technical functionality that has never been seen before. Exciting times.

If you’d like to read the Top 50 article, you can click on the image below.

Cogent Road makes the cover of Mortgage Technology Magazine

You can tell it’s summer in San Diego when surfboards show up in cubes at the Cogent Road office. Our office is about 15 minutes from the beach and in the summer a few of us hit the waves after work. The reality is that sometimes people disappear after lunch.

We’ve updated our Funding Suite application to help mortgage originators easily comply with Fannie Mae’s new loan quality initiative. The basic idea was that Fannie Mae wants originators to check that the loan applicant has acquired any new debt obligations prior to funding. If so, the new debt to income ratio could trigger a provision forcing the lender to buy back the loan at Fannie’s discretion. Not good.

To assist we first received approval from all three credit bureaus to offer “soft inquiry” credit reports for the purpose of reviewing the credit profile for changes prior to funding. This new report “called a Credit Refresh” can be ordered with or without credit scores – and is automatically audited by the software to reveal:

1. any new tradelines (new debt obligations) not previously reported
2. any changes in debt balances for existing accounts
3. any new credit inquiries (which we will verify as to whether was a result of a new credit application)
4. any new public records or tax liens

If the lender wants a more detailed review, a new “side by side” viewer displays both the original credit report used for qualification purposes along side the new Credit Refresh report. All in all a very slick, easy to use solution.

Here is a two minute video of our Credit Refresh tools in action.

As I prepared a blog to continue the theme of credit proofreading I thought it might help to lay a little groundwork. Without it, I might lose some mortgage originators from the conversation before it even began.

Credit proofreading simply means computer analysis of a credit profile to ensure its optimized for borrowing strength.

Not to sound simplistic, but remember that  a credit profile is not a credit report. The traditional, paper credit report is actually a grossly simplistic representation of the data within your borrower’s credit profile. The fact that you are looking at a merged credit report should clue you in to the fact that the tradelines you see can’t show you the whole picture. Three lines of data have been “merged” into one.

It wasn’t that many years ago (I’m talking the early nineties) when mortgage professionals received credit reports via fax several hours after the request. The credit data from three sources was merged and organized on paper in ways underwriters could understand. That’s right, actual people reviewed these paper reports tradeline by tradeline to determine a borrower’s eligibility. Laying out the data on paper was the best solution technology offered at the time.

But remember, we are talking about data here. Lots and lots of data, which when  combined create our borrower’s credit history. Today’s mortgage brokers have become so accustomed to the old paper format they’ve lost sight of the data behind it. And they’ve forgone the business opportunities inherent in those data.

Need some examples? For starters, a majority of credit reports get reissued to Fannie Mae, Freddie Mac or some other automated underwriting system. These systems read data – not paper. How can you tell by looking at a paper report what the underwriting conditions will be? Here’s another one… how can you tell if there are reporting errors that may be wrongfully lowering the credit score? There are more, but my point is that looking at paper will only tell you so much. And not very much at that.

I realized brokers don’t understand this when I discovered that most of our mortgage clients spend their entire loan processing lives in their LOS (loan origination systems) like Calyx Point, or Encompass. And they do so because these systems accept a paper based credit report directly into their loan file. They are so accustomed to manually studying paper credit reports – the idea of using computers to assist them in their analysis never even occurs to them.

I’ll get on my soapbox and say (annoyingly loudly) that you’ve simply got to get out of your LOS system and start analyzing credit profiles. Failure to do may end up costing you loans and referrals. Instead, let specialized credit management software help you analyze the deep data elements in a credit profile. You’ll then discover things about your borrower that a paper credit report could never reveal– things that can help you close loans you’d otherwise not. Software can tell you if credit scores are held down by outdated or blatantly wrong information in the profile. You can even see what Fannie Mae or Freddie Mac will think of the file – before you pay to run it through their systems. You can even discuss a credit profile with your clients in ways that will teach them how to use debt in ways that can maximize their scores.

This is serious business, and mortgage originators that get it (and I know they exist because I’ve talked with them) are closing more loans and increasing client loyalty. The average consumer understands the financial importance of their credit profiles. The new breed of mortgage originator understands that credit analysis tools can help protect their clients credit health and optimize scores. They’ve positioned themselves as  credit profile experts with the technical competence to put their clients in the best loans.

These credit proofreading tools exist – and every one I’ve discussed is free. You just won’t find them in your LOS.