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A Hot Mortgage Industry Fuels the Competitive Fires

Field Report: First Franklin, San Jose, Calif.

"Frenzy" might be the best word to describe the current state of the mortgage lending business. "It used to be that at the end of 30 years you went to the bowling alley, burned the mortgage and everyone was happy," says CIO Kelly Williams of First Franklin, a division of National City Bank of Indiana, which specializes in "nonconforming" (that is, for first-time and credit-challenged borrowers) residential mortgage loans and home equity lines of credit. "Now, people want to switch mortgages constantly and use the investment in their homes as a financial instrument. This puts pressure on mortgage companies to get more creative and get out of the box with new products quickly. In this industry, first to market wins."

The technology breakthrough that has enabled First Franklin to prosper is an automated underwriting system built with BEA WebLogic Server and WebLogic Integration. Called EasyWriter 2, the company's IT group developed the system to manage loan applicant information and improve its underwriters' decision-making about whether to approve loans. And from the perspective of Williams and chief technology architect and senior vice president of application development Brett Francis, EasyWriter 2 has set the stage for an even bigger breakthrough: a service-oriented architecture (SOA) and soon, business process-driven composite applications.

First Franklin employed BEA technology to build an SOA to support a loan origination system and other application services that track and manage loan status. The SOA also allows First Franklin to link up with industry standards and XML documents important to the mortgage industry. A Web service for reporting presages greater plans for business intelligence and analytics to be made available through the SOA.

"We are already seeing the benefits of the SOA approach," says Francis. "We have one service that does all the pricing modifications for all of our applications instead of having to repeat this function in every application. We can make changes faster because we have oriented things around the business. For example, one of our corporate departments wanted to do some analysis using the same service that our automated underwriting application uses to get a price. So, their request wasn't 'give me a price' but 'give me all the loans and all the prices.' It only took us about two weeks to come up with a separate Web app that could do the analysis in batch."

The missing piece — and the focus of First Franklin's current efforts — is an enterprise service bus (ESB). "Once you have an ESB you can get away from tightly coupled connections between applications and really get into corporate orchestration of services for business processes," Francis observes. "No matter what the component model, if the services or applications talk point-to-point, you'll end up with spaghetti. We need the ESB to separate the services from the applications that use them in order to build truly composite applications on top of the SOA."

The biggest challenge First Franklin has faced is defining business processes. "Prototyping is very beneficial because that's really the only way to capture what the business process is doing at a particular point in time, versus trying to document the processes and keep that up to date," says Francis. "There's a lot of noise: Processes fluctuate in the mortgage business." It doesn't look like things will settle down any time soon.

— David Stodder