DESIGN AND IMPLEMENTATION OF SOFTWARE FOR MORTGAGE BANKING

Thesis Overview

1.0       INTRODUCTIONIn our society today the use of computer especially in banking sector of the economy have been so eminent. Nearly all banking or     financial institutions have computerized their banking operation. The major reason or the fact has been using computer to manage the flow of information within the institution. This is lightly necessary since the survival  of any institution including the financial institution like commercial Banks, mortgage Banks Insurance computer etc. depend much on a viable information system. An information system that enables the users to track necessary records and transaction related to the institution  in a possible minimum time. Apart from using computer in ensuring a viable information system (IS), error prone information by extensive mammal data mentioned and many others to perform the entire task mentioned and many others have been enhanced by the application software. Application software are programs that direct the performance of a particular use or application of computers and computer networks to meet the information processing needs of end user. This is to say without the application software a computing system I incapable of performing the user task. This is often referred to as computerization. The following section of the project report present the feasibility of computerizing the operation of mortgage banking. 1.1 BACKGROUND OF THE STUDYDepository institutions have traditionary originated residential  mortgage louns to hold in their loan portfolios and mortgage banking is a natural extension of this traditional origination process. Although it can include loan origination mortgage banking goes beyond  this basic activity. A bank that only originates and holds mortgage loans in its loans in its loan portfolio has not engaged in mortgage banking as defined here.Mortgage banking generally involves originates, purchases and sales through the secondary mortgage market. A  mortgage bank can retain or sell loans it originates and retain or sell the servicing on those loans. Through mortgage banking national banks can and do participate in any or a combination of these activities Banks can also participate in mortgage banking activities by purchasing rather than originating loans.The mortgage banking industry is highly completive and involves many firms and intense competition. Firms engaged in mortgage banking vary in size from very small local firms to exceptionally large, nationwide operations commercial banks and their subsidiaries and   affiliates make up a large and growing proportion of the  mortgage banking industry.Mortgage banking activities generate fee income and provide cross-selling opportunities that enhance a bank’s retail banking franchise. The general shift from traditional lending to mortgage banking activities has take place in the context of a more recent general  shift by commercial banks from interest income activates to non-interest, fee generating activities.1.2              STATEMENT OF PROBLEMThe larger challenge facing lending institutions today is the is the lack of system and processes that track, and analysis data effectively. The loan origination process generates massive amounts of data that needs to be managed by the asset management finance and servicing functions, key management reporting and data analysis capabilities are critical in dealing with issues and quantifying trends in delinquency  rates and tracking of compliance metrics-basically the bulk of mortgage banking operations. In addition, these functional areas are responsible for meeting the disclosure requirements of investors, regulatory and rating agencies.In addition many banks are still performing many processes semi-manually. For example to produce data for monthly servicing valuations, hedging, tax, management reporting and forecasting, banks extract data from multiple systems often residing in different locations or individual PCS After this laborious process the data is manically consolidated in spreadsheets resulting in another significant resource and time drain, along with the potential for human error. By the snapshot view that is weeks bland and prone to errors. Overall these inefficiencies increase the cost of operations, risk and potential loss to the mortgage company1.3 PURPOSE OF STUDYThe purpose of this study is to evaluate the present manual  or semi-manual system of mortgage banking operations and develop an application software to perform those manual task or data processing and analyses using computer.1.4 OBJECTIVES OF STUDYThe objective of this study is to provide an information technological   option the use of computer in handling the mortgage loan origination and it’s servicing in mortgage banking operations, to delver an effective and efficient data storage, retrieval processing and reporting.1.5 SCOPE OF THE PROBLEMThe scope of the problem centered on the difficulty and time constraint with the manual system in producing the required report associated with the loan origination and servicing in the mortgage banking operations.