Return on Quality

Cogent has won Mortgage Technology magazine’s 2011 Lasting Impact Award.  The Lasting Impact Award acknowledges an individual, group or company responsible for a technology initiative or development proven to have an enduring influence that has transformed mortgage finance. 

In presenting the award, the judges cited Cogent’s “fundamental innovation as adapting quality improvement principles from manufacturing industries to the mortgage industry.”  For more information, see the links below.

See Mortgage Technology award citation here (PDF)

See how Cogent QC Systems has made a Lasting Impact.

This is a welcome validation of everything Cogent has been doing since 1991 to help lenders across the industry to improve origination and servicing quality .  Many thanks to the judges at MT magazine.

For the second time, Cogent QC Systems has been selected as a finalist for Mortgage Technology magazine’s Lasting Impact Award.  The Lasting Impact Award “acknowledges an individual, group or company responsible for a technology initiative or development proven to have an enduring influence that’s transformed mortgage finance.”

Cogent has been recognized by Mortgage Technology five times in the past decade, receiving the Fix-It Award in 2003, Top 100 Vendors in 2005, Top 25 Vendors in 2006, runner-up in the Lasting Impact Award in 2009, and finalist for the Lasting Impact Award in 2011.

Cogent’s commitment to continuous improvement, in partnership with our clients, is an integral part of our corporate culture.  For more information on why Cogent QC Systems lead the industry, check here.

Posted by Kaan Etem

               
In the world of mortgage quality control (QC), the process of communicating the QC department’s findings to the field, recording their feedback and working together to resolve adverse QC findings has been notably inefficient.  In some companies, the QC department schedules regular weekly calls with the field, which may include branch managers, regional origination groups, servicing departments, or similar players.  During these calls, which can last hours, the field often questions the adverse findings of QC, while QC defends its actions.  Alternatively, QC departments may perform this process by exchanging emails and file attachments with the field.  And sometimes, it’s a combination of both.  Whatever the case, the systems that have evolved to document and track this process are sub-optimal.  Usually invented by business users – outside their usual job descriptions, using whatever tools are at hand (Excel, Word, Access, etc.) – these systems are usually cumbersome, error-prone and not secure.

Cogent’s first attempt at improving this process was to use the same familiar tools but to integrate the exchanged data with the Cogent QC System. Thus, the System automated the gathering and generation of QC findings and exported them to Excel worksheets that were attached to outgoing emails.  The field provided feedback to QC using specific cells in the Excel spreadsheets, which they then re-attached to emails that were returned to QC.  Finally, QC imported the feedback from the Excel spreadsheets into the Cogent QC System, which tracked returned and outstanding feedback items and allowed reporting on returned feedback.  This approach imposed some controls on the workflow, integrated feedback into the audit record, and facilitated reporting.  However, there were still shortcomings: saving and attaching Excel spreadsheets to emails was neither secure nor error-free, the import process was inflexible, and there was no facility for multi-iteration feedback between QC and the field.

For the .NET platform, Cogent started from scratch.  Instead of exchanging Excel attachments by email, CogentQC.NET users now send emails with system-generated links to a secure website, where feedback recipients log in and submit their responses directly online.  The new Web application, running on Microsoft IIS, writes directly to the same Microsoft SQL Server database to which the main application writes, so that feedback is immediately available.  Unlimited feedback iterations are possible, all of which are reportable, and both QC and the field are alerted when they have incoming feedback.  Everything is now contained within the Cogent QC System, except for the emails exchanged between QC and the field.  This new feature of CogentQC.NET has become one of Cogent’s most popular innovations.

Posted by Kaan Etem

That red symbol at the heart of Cogent’s logo is the Greek letter sigma, which is the mathematical symbol for the statistical concept of “standard deviation”.   This is a reminder that statistical methods are central to Cogent QC Systems’ approach to improving the quality control process. In a nutshell, these methods enable quality control professionals to more efficiently identify and correct significant defects in loan production and servicing processes.
 
Statistical methods have been used in quality control since the 1920’s. In fact, one of the most powerful reports available in Cogent QC Systems, the control chart, was invented by Walter Shewhart, an engineer at Bell Laboratories, in 1924.  Statistical methods were also emphasized by W. Edwards Deming and Joseph Juran, the fathers of modern quality control, who (separately) took these methods to Japan in the 1950’s, contributing to the “Japanese miracle” of manufacturing quality and economic growth in the 1960’s and beyond.
 
Here’s brief timeline of the history of statistical quality control (and its acronyms): SPC >> TQM >> 6 Sigma
 
1920’s:  Walter Shewhart (Bell Labs) invents statistical control charts, pioneers methods of SPC (statistical process control)

1950’s:  Deming and Juran bring statistical QC to Japan; Deming coins the acronyms TQM (total quality management) and PDCA (plan-do-check-act)

1960’s-70’s:  Japan’s major corporations implement statistical QC, leading to the “Japanese Miracle”

1981:  Motorola incorporates statistical QC into a new quality management program called 6 Sigma; coins the acronym DMAIC (define-measure-analyze-improve-control)

1980’s-present:  “Quality Revolution” brings statistical QC methods to U.S. manufacturing, health care, and financial services
 
Since the mid-1990’s, when Cogent pioneered the use of statistical sampling and reporting methods in mortgage quality control, the use of statistics has become recognized as key to efficient and effective process improvement.  And yet, widespread understanding and adoption of robust statistical methods is not complete.  Cogent’s goal is to facilitate this adoption and to design systems that make the job as easy as possible. 

It’s official.  Version 2.0 of CogentQC.NET has now been released.  You may have seen the news in Housingwire or MortgageOrb but if not, you can find the Cogent news release here. 

2009 was an unusual year for client IT departments (unless it’s actually “the new normal”, God forbid.)  After the mortgage crisis and economic meltdown, it seemed like IT staffing and budgets were reduced and lenders were stuck in neutral, reluctant to take any steps other than cost-cutting.  IT staff had too many projects to handle and consequently Cogent saw only a handful of clients upgrading to CogentQC.NET.

However, the end of 2009 saw an acceleration of activity.  We now have enough upgrade projects to take us through the first quarter, at least.  And as business gets back to normal, we have even begun to talk with clients about enhancements to their systems that will automate and optimize more of their business processes. 

It’s going to be a busy year.

Cogent clients who attended our October 28th Web Seminar, “What’s New in CogentQC.NET”, will have heard the announcement that Cogent is releasing Version 2.0 in January 2010.  For the rest of the world, this is our official announcement.

When it comes to versioniong, Cogent is more like Google than Microsoft. Microsoft releases a defined set of new functions on a particular date – like Windows 7 was released on Thursday, October 22 – and charges for the upgrade.  Google adds new functionality all the time behind the scenes; not only were they in beta for many years, but they still don’t have any version numbers on their search engine. Likewise, Cogent has been releasing features continuously without categorizing them into Version numbers - and without charging for upgrades.

Like most things Cogent, this is a soft release.  We’ve been on Version 1.x for 3.5 years now. We now see that the system, and the .NET/SQL Server platform as a whole, are stable. We also have several client upgrades under our belts and we have the conversion process down pretty well, including working with DTS data loads.

Look for a list of “official” Version 2.0 features shortly - but know that some early adopter clients already have some “2.0″ features.

Cogent Economics has been commended by Mortgage Technology Magazine for its lasting impact on the mortgage industry.   In announcing its annual Tech Awards at last week’s Mortgage Banker’s Association Annual Convention, the magazine’s editors cited Cogent for “pioneering the use of statistical sampling [in mortgage quality control] to replace the straight 10% random sample with a calculated statistical random sample, which could be 1% or less of a lender’s origination volume, resulting in a 90% reduction in costs.”  More information here.

Although Cogent’s QC Systems do a lot more than intelligently reduce sample sizes, it’s the statistical sampling methodology that industry veterans remember.   Over the years, Cogent has been a Mortgage Technology Top 25 Vendor and a winner of the magazine’s Fix-It Award, but it’s particularly gratifying to be recognized for long term contributions to the industry. 

This blog is part of our ongoing effort to continuously improve mortgage quality control.  Here, we’ll be talking about a lot more than just Cogent QC Systems.  We hope you’ll be part of the conversation.