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LIXI praises big three mortgage brokers for making e-Commerce a reality

The Lending Industry XML Initiative (LIXI) is praising Aussie Home Loans, Australian Finance Group and Mortgage Choice for announcing a new deal that will allow mortgage brokers and banks to process online applications in order to accelerate the home loan process.

Australia's three largest mortgage brokers are rolling out an industry platform for electronic submission of mortgage applications.

The platform was written by NextGen.Net using Credit Application Language (CAL) devised by LIXI, a not-for-profit organisation made up of lending industry representatives. The platform is the first CAL compliant system to be adopted on such a scale.

LIXI developed CAL to allow the information required for home loans to be transferred electronically between parties in the lending chain. Prior to CAL, each lender had separate, non-compatible systems that relied heavily on paper based transactions.

LIXI based platforms will revolutionise the loan application and lodgement process with customers gaining approvals in minutes as lenders and brokers improve efficiency.

ANZ is the first lender to integrate with the platform, with Macquarie Bank, ING and the Commonwealth Bank to join in the next few months.

While Aussie, Mortgage Choice and Australian Finance Group commissioned the technology, it will be made available to the entire mortgage industry once the first phase of the program is completed.

As a result, it is expected that at least fifty percent of mortgage brokers will commence electronic loan submission before December 2005.

Aussie Group, managing director, John Symond believes the platform represents a major watershed for the mortgage broking industry and will improve the position of brokers as the preferred distribution channel for lenders.

LIXI Chairman, Socrates Vasiliadis, says that the project is the culmination of years of work from the e-commerce organisation first formed in 2000.
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"LIXI's CAL was first created in 2001 to allow the electronic submission of a Home loan application. The introduction of this new platform takes e-commerce from a blue sky concept to reality.

"Already we are seeing approval times improved by at least 50 percent through reduced data entry time and increased data accuracy," says Mr Vasiliadis.
Mr Symonds agrees, pointing out that the initial roll-out had resulted in a high percentage of "real time" approvals, faster turnarounds, less paperwork, greater accuracy in the application and document preparation process, elimination of the need to follow up data and higher customer satisfaction.

The NextGen.Net platform allows communication between brokers and banks but has the potential to be expanded to other parties in the mortgage chain.
Already LIXI has updated CAL to allow online data to be exchanged by solicitors, settlement agents, brokers, mortgage insurers and valuers. It aims to automate the residential lending industry from application through to settlement. LIXI believes this will reduce costs by more than an estimated $10 million per year.
"Applying for a mortgage is amazingly complex involving up to nine organizations. Much of the data required is still exchanged via fax and phone creating a high margin for error," says Mr Vasiliadis.

"Automation offers lenders and brokers cost efficiencies and service improvements through reduced data entry, less rework and lower error rates in the transmission of information. Brokers will also be able to track their commissions and be paid faster. In the end it will be consumers who benefit from faster approvals, better service, less paperwork and possibly cost savings."

With the major broker firms adopting CAL, Mr Vasiliadis believes the remainder of the industry will quickly embrace e-commerce. He explains that "Brokers who ignore e-commerce and the LIXI standard will lose business as customers simply won't wait the extra time for their loan to be approved or processed".

CAL has already been adopted by more than 22 LIXI members and a further 30 associates, including Commonwealth Bank of Australia, ING Bank, Westpac, ANZ, Adelaide Bank, Perpetual, Allette Systems, Lending Technology Services, Mortgage Choice, Pioneer Mortgage Services, PMI Mortgage Insurance, GE, Smartline, Loanmart and Gadens.

CAL was specifically designed for the Australian mortgage finance industry to ensure that it adequately met with its standards and needs. It is now recognized as one of the world's best e-commerce banking standards.