The Loan Management System (LMSN) is a turn-key, end-user, online service (Desha) that connects borrowers seeking high-risk, secure loans with lenders looking for high-quality collateralized loans. They may obtain higher loan to value ratios than with standard financing, without prepayment fees or other fees for early repayment. Because LMS offers its clients the loan-buying power directly from the lender, more borrowers benefit than from traditional financing. Moreover, LMS eliminates the need for an underwriter, reducing paperwork and fees.
An LMS is a unique online application that provides both the lender and borrower with an online management solution. The loan management system provides collateral security for both the lender and borrower by providing a digital signature, a password protection system, and secure processing. The system connects the two companies through secured online lending solutions that require minimal or no upfront fees. Furthermore, the lending solutions are compatible with hundreds of different credit applications.
In order for LMS to meet its fullest potential, it must remain compliant with federal and state laws and regulations. Therefore, many organizations provide training for their LMS customers on how to meet the regulations in order to ensure maximum customer benefits. Regulatory compliance also ensures that the loan management system remains compliant with the proper reporting requirements from government auditors. Auditors will routinely review the LMS to identify areas that may benefit from modification based on federal and state laws. This helps ensure that the system remains sound for years to come.
In order to successfully integrate the LMS into a lending process, an organization needs to make a number of configuration changes. Many companies make simple configuration changes to improve their overall customer experience, while others make more complex configuration changes to improve accessibility, functionality, and efficiency. There are also organizations that go the route of incorporating the LMS into the out-of-the-box loan management system.
There are several reasons why organizations decide to integrate the loan management system into an out-of-the-box system first instead of integrating the entire system at first. First, most LMS vendors provide online training on how to make the necessary configuration changes to the LMS. While the training is relatively simple and does not require any special technical skills, the majority of employees make little to no modifications to their system. After receiving the required training, these employees make the necessary configuration changes, enabling them to begin working with the new configuration quickly and smoothly.
Second, some organizations have a difficult time making the full configuration changes needed to properly integrate the loan management system with the out-of-the-box system. Lending institutions have traditionally been much larger than the current LMS system. When a large organization implements its LMS, many of the organization’s employees will be transferred to a new department focused on the integration process. While this may be fine for larger organizations that have the personnel in-charge of integrating the new system, smaller lending institutions often have a difficult time finding the necessary personnel, resources, and training to make the full configuration change.
The third reason why some organizations choose to go with the in-box loan management system configuration first instead of integrating the entire system at first is to save money. While it can certainly be tempting to try and make all of the changes necessary to integrate the loan management system with the out-of-box software, many organizations find that they need to make minor configuration changes to the out-of-the-box software to properly configure the loan management system. Since the majority of lenders make their initial investment based upon the amount of money that they loan, finding ways to cut costs while making the required configuration changes can be a challenge for small lending institutions. Even large lending institutions sometimes find that making a few changes to the loan management system configuration, like removing the fax line or adding an answering machine, saves them a significant amount of money. By making the simple configuration changes, such as adjusting the number of credit cards a lender allows their employees to use or customizing the way in which the loan management system works, small lending institutions can save money without having to change the way that they operate their business.
Most importantly, the key to being successful at integrating your loan management system at inception is to make sure that you are prepared to deal with any difficulties that may arise along the way. Since the majority of loan management software programs are designed to automatically complete the necessary configuration steps when they detect a change in the status of one or more transactions, there is really no reason to worry if you experience a problem along the way. Once you have defined the action that needs to be taken, the system will take care of the rest. If the problem involves a customer service representative, you should always make sure that you contact them quickly and in an organized fashion so that they can be handled in the most professional manner possible. In many ways, problems with origination processing are similar to problems that arise in other areas of the small lending industry, since it is essential that borrowers be given the most personalized service possible.