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North Shore Cre Loan Origination System & Freddie Mac’s Multifamily Div

(June 2008) – After choosing to implement the web-based commercial real estate lending software application from North Shore Systems (NSS), Freddie Mac’s Multifamily Lending Division based in McLean, Virginia, has successfully completed the first phase of their conversion to the North Shore’s lending system, which they will use to source thousands of multifamily loans a year.

The North Shore system has broad commercial lending capabilities, a flexible architecture, and rule-based process automation features. By choosing to work with a COTS (Commercial Off-The-Shelf) vendor instead of building software internally, Freddie Mac has already been able to effectively release the first phase of the North Shore system in a relatively short timeframe without adding internal overhead.

North Shore is designed for not only internal workflow automation, but for capturing loan and property data from external parties … in this case, the lenders selling loans to FM. It provides an externally-facing, web-based interface for customers to upload and validate data files (e.g. Excel, XML) and electronic documents. This approach has many immediate benefits, and lays the groundwork for a fully-automated origination process.

External users can access the system online through the internet. The application provides flexibility and security by providing a dynamic user interface, customized for different user roles (internal user or external/third party). By leveraging this architecture and using relatively new data standards, North Shore customers like Freddie have been able to gain efficiencies not previously attainable.

With positive feedback from lender customers, this successful initial implementation supplies momentum for Freddie Mac in its endeavor to better serve its customers and gain efficiencies through a new, state-of-the-art platform.

One of the primary goals of North Shore customers is to be responsive to the needs of the marketplace by configuring and offering new loan products in relatively short order. The flexibility, configurability, and rules-driven architecture of North Shore allows them to quickly and efficiently establish a new lending program or loan product by simply modifying sets of underwriting, routing, and decisioning rules.

Other specific attainable goals include reducing cost/duration to implement a new mortgage product by 25%, increasing customer satisfaction with improved turn-around times for quoting and rate lock, and retirement of inefficient legacy systems.

The president of North Shore Systems, Brian McCracken, comments “Like our other customers, Freddie Mac will be taking advantage of a great deal of out-of-the-box functionality that has resulted from ten years of enhancing the system. The GSE model is unique, though, and does require some customization. Our integrated rules-engine is being enhanced to drive data validation, workflow automation, and the rest of the origination process. This is obviously a large, far-reaching project and NSS has embraced the opportunity to succeed in this environment. Critical to its success, in addition to the systems capabilities, is the human factor and collaboration required between IT, the business side, and in this case, the Freddie lenders as well.”

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