Climbing Aboard a VAN
Thursday, June 7, 2012, 8:00 AM
Imagine an active highway where every single bit of data pertaining to a mortgage could be sent via EDI to and from secondary and primary lenders. Every service and every bit of data are located on this network that continually flows without a hitch. Now imagine that there are several of these, all unique and different from each other. This accurately describes what value-added networks are increasingly becoming like in the mortgage-lending business.
In short, a value-added network not only carries the requested data but also provides something else. This can range from just a few simple services to a fully-fledged interactive database that can be accessed by everyone on the network. A value-added network specifically dedicated to the EDI of a mortgage industry allows for a secondary lender to talk back and forth with the final buyer. Value-added networks also allow for a way for lender to eliminate the footwork and send relevant files to other relevant groups, such as appraisers, credit bureaus and title insurers, while receiving any transmissions back from them. Value-added networks also have the additional functionality of being able to interface with specialized software for things such as automated underwriting.
The fact that all the running around that was previously a time-consuming tradition is eliminated by a proper value-added network means that the overall mortgage process is reduced and turnaround time between lenders and service providers is also dramatically reduced.
Because these networks have the additional value of being able to maintain multiple connections between users and trade partners, there is no need to rely on a single service provider. This ultimately increases the reliability of the VAN.
The ability to understand and communicate via multiple protocols and then convert it to other easily understood formats helps increase communication rates between lending establishments that do not have formats specifically for X12 data interchange formats yet. Value-added networks also mean that users who are unable to afford creating certain services and software are still able to access it via the network.
Bandwidth is still a primary bump in the road for VANs that might traverse through communications with more limited networks or lenders still using a 56k connections. Even if each type of low-bandwidth location is only accessible directly by its users or through yet another value-added network, this does not mean that they should ever be accessed from the internet. These types of networks have specifically been engineered to be maintained separately from the internet in order to ensure the security of customer privacy and service availability. These value-added networks are at all times kept separate from the drastically more dangerous and very public internet.
To conclude, VANs are nothing new as a data-handling concept. It is the fact that mortgage companies and lending institutions are starting to acquire, develop and make use of them that is. These types of networks have been in the works, being upgraded and maintained, for a number of years. These business models, however, are still entirely new to some parts of the industry and even more parts have no idea about them or their EDI capabilities.