To recap Part 1 of the LOS vs ELS series, I took a look at what has historically been recognized as the LOS. Overpromises of an end-to-end solution offering the flexibility lenders needed, while under-delivering technology that was mediocre at best – that is – if the implementation even got the client off the ground.
With lenders catching on to the false promises of LOS providers, it was clear they needed to look for something different. Enter the ELS, a term coined by Mortgage Cadence in 2005. The Enterprise Lending Solution was created through not only hearing, but understanding, the cries for help within the industry. Lenders didn't need a system to simply store their loans - they needed a system that allowed each person involved in the lifecycle of a loan to immediately access that loan at the appropriate time, in a manner that was efficient, and in a way that reduced the risk of manual errors.
What did all of this mean for the ELS? The ELS needed to replace the disparate systems and create one, consolidated solution. It also meant that a workflow engine needed to be put in place allowing the creation of rules to drive tasks and manage the loan process with as little human intervention as possible. No longer would users have to re-input data between systems and risk manual data-entry errors. The efficiency gains and return on investment were enough to convince many forward-thinking lenders to take a chance, since what they were doing was not working. The results speak for itself:case studies showing 30% efficiency gains and cost savings in the millions over the first few years.
However, you will notice I have been speaking in the past tense. The ELS was introduced to the marketplace in 2005 with great success. The buzz word caught on and became almost synonymous with "LOS" as technology providers sought to ride the "ELS Wave", diluting the term. Where are we today and what does the future look like as the mortgage industry rebuilds? Stay tuned to find out.
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