Your Proprietary Problems

If you've been recruited recently, the word "proprietary" likely isn't a stranger to you. It's become a piece of the pitch - our "proprietary software", "proprietary LOS", "proprietary CRM" is pitched to recruits often as a way to woo them with the appearance of "ours is better and unique so you can't find it elsewhere". But when systems go awry, those proprietary systems become your proprietary problems.

Case in point - Guild Mortgage. Last week, their "proprietary" system malfunctioned, causing major system issues and delays for the customers, originators, and their partners. Merry Christmas, y'all. Hope you didn't need that cash out or to be in your new home before the holidays. Hope that uncertainty was on your Amazon Wish List. Because if you were working with Guild last week, that's all you were able to get. Better than coal, I suppose.

I'm not picking on Guild, here. But I am pointing out a problem - from my understanding the cause of their issues was an update to their systems that caused a malfunction. When large companies run into tech issues of that magnitude, it's generally all hands on deck to fix the problem within minutes, or hours at worst - not days, and certainly not weeks. Like Guild, many other mortgage companies are scoffing at outside options and focusing on their own technology internally - for everything from CRM (Client Relationship Management systems), to LOS (Loan Origination Software) and marketing, the "we can do it better and (often) cheaper on our own" mindset is taken hold at several large firm. But what happens when things go sideways? The "all hands on deck" crew is thin when the whole team is within your walls.

Think a glitch with Ellie Mae's Encompass would have caused delays anywhere near as long? Doubtful, due to the size and reach of the Encompass platform, and the large amount of due diligence that must be done in testing the platform and the bandwidth and budget for teams to do it right.

Proprietary software is a dangerous game for mortgage companies. Like Loan Officers trying to be Realtors, or Realtors trying to sell Essential Oils as aside hustle - those working to be Jacks of all trades tend to be masters of none. And software is a dangerous tool to mess with - we all know technology is a blessing, until it's a curse. We need it, but it's astounding just how easy a small glitch can cripple us and our business. Lenders in general don't have the IT capacity to troubleshoot major technology breakdowns. Even internal IT teams rely largely on outside help when systems go awry, and if the only team that can fix it is the team that broke it, delays are inevitable.

When choosing a company to work for and with, keep this in mind. Like most things, proprietary technology is a double edged sword. Like great rates with terrible support and systems, proprietary tech can offer up a nice benefit when it works, but when it doesn't, it can be disastrous. Proprietary technology can quickly become proprietary problems, and when you're the only one in the industry experiencing those problems, consumers and business partners may find it a better option to work with a platform that's a little less proprietary.