What is Loan Origination Software?

Loan Origination Software is used by financial services institutions and mortgage loan originators (MLOs) to help automate portions of the end-to-end loan portfolio cycle.

This includes document and identity verification, loan processing, credit and loan approval, and loan sanctioning.

Loan origination software should also provide components related to credit risk assessment and regulatory compliance.

Loan origination software benefits

The software should provide:

  • Underwriting automation with predefined risk analysis and loan approval algorithms. This decreases the need for manual calculations and helps accelerate credit approval, adding to customer convenience.
  • Self-service and enhanced efficiency by providing customer portals to reduce the need for administrative tasks within the company (i.e., bill pay).
  • Reporting analytics in real-time helps monitor the loan origination and loan servicing cycle process end-to-end.

 

Loan origination software features

For inclusion into the loan origination software category, a product should provide:

  • Loan processing to sanction loan requests
  • Document management (applications, income and asset reports)
  • Centralized database to store and access information
  • Audit trail
  • Compliance management to track adherence or non-adherence to policies
  • Adaptation to regulatory requirements, industry policies, and scoring
  • Effective across multiple digital channels
  • Integration with loan servicing software
  • Online customer application engine
  • Pricing engine and loan pricing scenarios
  • Integrate with business process management frameworks to ensure greater efficiency across the organization

 

Related software categories