Western AgCredit is a borrower-owned, financial services cooperative that focuses on businesses within the agricultural industry, particularly in the states of Utah, Wyoming, Nevada, and Arizona.
Several years ago, Western AgCredit employed a loan origination process that was both tedious and lengthy. Once a loan was approved, loan officers were required to complete a long, multi-column, multi-page checklist to specify to the loan documentation department the necessary information and provisions for the loan. The problem was that each loan officer had his/her own way of filling out the checklist, which led to a great deal of questions and back and forth verifications between the loan documentation department and the officer. Once the checklist was finalized, the loan documentation department then used a custom mail merge system in Microsoft Word to generate the necessary documents. Even though this method was better than standard cut and paste techniques, the system was not user friendly. Few of Western AgCredit’s employees knew how to use it correctly, and many had to work years before understanding the program. In 2005, Western AgCredit decided to streamline the process.
Intrigued by online expert systems such as TurboTax, Western AgCredit searched for a better solution to their loan origination process. After adopting, and subsequently abandoning, various programs, Western AgCredit discovered HotDocs. “We were looking for a program with flexibility, adaptability, and the ability to use our own documents,” stated David Brown, the company’s Vice President of Credit Services, “HotDocs was a perfect match for us.”
In 2006, Western AgCredit purchased HotDocs Server, HotDocs Corporation’s solution for web-based document generation. They then formed a committee to develop what they called the “Master Interview”. Instead of a checklist, loan officers now use HotDocs to enter all customer level and loan level information. This Master Interview generates a summary document, known as the Loan Officer Input Sheet (LOIS). The LOIS now replaces the long checklist that officers were previously required to complete, and once signed and approved, is also used as the documentation for the loan. As well, the loan documentation department uses HotDocs to generate any necessary legal documents for the loan.
According to Western AgCredit, one of the most interesting aspects of HotDocs was its ease of use. All the automation work was designed, completed, and tested by the end-users, so the company didn’t need outside programmers to build the system. “The program is intuitive because it’s how the end-user thinks,” said Brown.
Implementing HotDocs into the loan origination process has yielded many benefits for Western AgCredit. “Efficiency has been huge, both on the loan officer side and the loan documentation side,” said Brown. Overall, Western AgCredit has been able to process more transactions without needing to add staff. In 2006, when HotDocs was first adopted, Western AgCredit processed a little over 1,500 loans. In 2008, the number increased to 3,000 processed loans. “It used to take 2-3 days on average to produce a short-term commercial loan, but with HotDocs, we can now generate one within a day, sometimes even within a matter of minutes.”
Moreover, HotDocs has added a new level of standardization to the company. “As the complexity of regulations within the financial industry continues to rise, standardization is becoming ever more important. HotDocs has become our communication medium,” continued Brown, “No matter what loan is written, it’s always done through HotDocs. It’s the one program everyone uses, and as such, we ensure that all changes in regulations or procedures are immediately written into HotDocs. That provides an enormous amount of security for us. Our loan officers don’t have to worry about new updates. HotDocs simply leads them through the process.”