Reconstructing IT for 40,000 Mortgage Brokers

The unprecedented expansion a mortgage company was experiencing revealed a rickety technical foundation-one riddled with unreliable point-to-point interfaces, a heavy reliance on paper, multiple instances of data re-entry and no automated process man

As mortgage rates sank to an all-time low last year, 11-year-old Accredited Home Lenders Inc., which services an aggregate customer base of about 40,000 mortgage brokers, found itself a victim of its own success. The unprecedented expansion the company was experiencing revealed a rickety technical foundation—one riddled with unreliable point-to-point interfaces, a heavy reliance on paper, multiple instances of data re-entry and no automated process management.

Compounding the situation was the gaggle of homegrown systems the company had patched together that allowed for little communication internally or externally with brokers, investors and borrowers.

To fix the problem, San Diego-based AHL drafted a blueprint for a technology reconstruction that would improve communications with suppliers and provide more efficient services to customers.

AHL—which sold $1.6 billion in loans during the third quarter of last year, an 89 percent increase over the same quarter in 2002—wanted to dramatically streamline its workflows and simplify access to information, including automating its pipeline reporting, prequalification, application submission, underwriting decisions, loan funding and loan servicing.

After doing preliminary research to determine what kind of technology and services it might consider, AHL turned to WellFound Technology Inc., an Atlanta-based systems integrator that specializes in insurance-industry implementations.

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"We were building a business infrastructure that we needed to be robust enough to communicate to the broker community, and we needed a technology package integrated to our existing system that would allow that," said Jim Pathman, CIO of AHL.

With that construct in mind, WellFound sat down for an initial assessment with AHL and worked out a "current state" and "future state plan" to determine the course of action.

"They had built a lot of homegrown systems," said Paul Gain, WellFounds CEO. "Nothing at all talked to each other. It was pretty classic. At the time, one of their senior executives had a vision that theyre a bigger company now—they want to go public—and they want to handle things in an event-driven fashion, with the core of that business process management and [driving] information through the enterprise."

Working with WellFound, AHL developed a blueprint for an infrastructure that enables standards-based business-to-business communication. WellFound also helped AHL determine which technology providers to work with.

At the heart of the system is a multichannel customer portal from BEA Systems Inc. that models AHLs mortgage process, from origination through servicing of accounts, to help mortgage brokers as they sell residential (nonprime) mortgage loans. AHL and WellFound also implemented BEAs WebLogic Platform 8.1 infrastructure platform to enable AHL to access its critical back-end systems, including those dealing with loan origination, automated underwriting data warehousing, credit search and title search.

The business integration and process management layer is WebLogic Integration, the development platform is WebLogic Workshop and Web services is managed by Blue Titan Software Inc.s Network Director.

"Our mandate from AHL was: We cant afford to rewrite all these systems, and we cant afford to unplug, either," said WellFounds Gain. "So we had that as our given. We recommended 8.1, and it was still in beta. But we were very confident with where [BEA] was going. Our next challenge was keeping in our audience people who didnt even know how to spell Java [AHL is a Microsoft Corp. shop]. ... We wanted to leverage the whole Web services [movement] with XML."

What WellFound brought to the table was mortgage experience and expertise in enterprise transactions. It also had expertise in B2B transactions, according to Mike McCoy, director of enterprise architecture at AHL.

WellFound also brought its Mortgage Integration Framework, which uses standards-based software components and concepts—including XML and Web services—to integrate disparate systems. The framework enabled AHL to automate workflows internally and provide continuous event-driven notification to brokers throughout the lending life cycle.

One core component of the framework is a CDR (common data representation) that uses BEAs transformation engine. WellFound, however, configured the CDR so that the transformation engine complies with Mortgage Industry Standards Maintenance Organization, or MISMO, standards.

With MISMO natively in the architecture, AHL will be able to electronically trade information with its broker community through a simple portal interface.

Next Page: Keeping up with standards.