Industry Firsts and Historical Accomplishments
Many in the industry remember much of the innovation that occurred in the 80s and 90s as
mortgage technology came into its own. Historical records are limited, though. This document is
intended to record some of the history of mortgage technology as it happened, and to identify some
of the products and ideas that I, Scott Cooley, have worked on through the years. It starts from the
days when I first established Contour Software in 1982 while I was completing my last year at the
university, and extends through the decades to include some of the 100+ articles I’ve written, many
of which helped improve the industry and even were precursors to industry-revolutionizing
At Contour, my role as president and CEO was to come up with ideas and direct the company’s
research, developing solutions to the problems that our customers were facing. Over the years,
we were frequently the first to introduce a technology solution, yet we often introduced solutions too
early. For most of the solutions listed in this document, it would take years to achieve their
widespread adoption. There were exceptions, though, such as the credit reporting interface and
the loan origination system (LOS). Decades later, most of our ideas went on to become viable
products and were often duplicated by other vendors. In fact, it was fairly common for other
vendors to look at what Contour came out with and go to work to improve upon it.
Not listed below are the hundreds of original minor features that first appeared in the various
products we developed. Since we led the market for almost 20 years, we never looked at
competing systems. We were forced to design and develop from scratch what we thought our
Some might call it a mistake to never have filed any patents on the many inventions I worked on. I
suppose I was never a big believer in patents. I often thought that they would hobble industry
innovation if I prevented others from using new concepts and technologies.
A few of the dates below were estimated.
Loan Origination System
I built the first LOS after I performed an exhaustive search for anything that could print a loan
application at the time – and none was found. The original software was written for the Apple II in
Applesoft Basic and required one 5.25 inch diskette for each loan. This is widely considered the
birth of the LOS as it is known today. However, there were loan tracking systems built on multi-
million dollar mini or mainframe computers by the large banks and lenders. The primary
competition at the time was the IBM Selectric typewriter because of its speed for typing. Also, there
were even better typewriters by Lanier that would allow for pre-programmed tab stops which was a
big feature for typing onto pre-printed forms like the loan application. In one of the first demos to a
loan processor, the remark came back asking, “why would you put a TV on a typewriter?”
Laptop Loan Application
The Apple IIc was introduced which was Apple’s first attempt at a laptop computer. While this
computer was more a portable computer than a laptop (it didn’t even have a battery), it did allow
loan officers to take loan applications in a consumer’s home. Contour’s The Loan Handler was
used to take the loan application. Later, portable printers allowed for the printing of the loan
application and other upfront loan documents.
PC-Based Prequalification Software
The Loan Finder was introduced by Contour and was the first application designed for loan officers
to use for prequalifying borrowers. It would compute ratios, solve for unknowns, store a loan
product database and allow a loan officer to compare various loan scenarios. Financially, this
product was always difficult to justify as the amount it cost to build couldn’t be offset by what the
loan officers could afford to pay. A tragic aspect of this product was that I worked extensively with a
great loan officer who died from a car accident. He was just behind me on a curvy road and went
head on with a car from the opposite direction – it could have easily been me as well.
IBM PC and Hard Drives
Contour migrated its software to the IBM PC and left the Apple II line behind. The addition of a
10MB hard drive was a large enhancement as it ended the requirement of using diskettes to store
loan files. Contour’s software programs were migrated to MBasic which IBM sold and which came
from a small, little known firm called Microsoft. When Apple refused to allow Apple II software to
work on the new Mac, it was time to move to a different platform – one that was more appropriate
for the financial industry.
PC Based Loan Tracking
Contour introduced The Loan Tracker as the first software application that brought a larger office
the ability to track loans in the pipeline. It included a large number of canned reports and later, a
built-in report generator to allow users to design their own reports. Many of the reports were
fashioned after what was previously mainframe-based tracking systems. I then designed a large
number of reports that I thought would be great for our clients.
Up to this point, the LOS was for individual users. The invention of network PCs was a major
boom for Contour and its users. Contour developed the first multi-user LOS that would allow
users to access the same database of loans and protect two users from overwriting each others’
information should they try to work on the same file at the same time. Contour sold PCs, software
and Arcnet networking equipment (a private label version of Novell). Such systems were complex
so at the time, mortgage companies found it almost a requirement to buy the entire system from
Contour. This thrust us into the hardware business which further expanded the firm.
Laser Printed Loan Documents
Prior to HP entering the laser printer market, there were some very expensive systems. Contour
spent significant resources to program the various forms so that The Loan Handler could print the
entire form and data on blank paper. Just a few units of high end systems were sold as HP then
came out with their far less expensive printers (around $3000). Contour re-programmed to
support the HP printers and of course, the usage of such took off. The first laser project was a
failure though and we should have waited for a less expensive printer before jumping in.
Forms on the Screen
Contour was the first to introduce the ability to actually see the lending forms on the screen for data
entry. The impact was significant from a training perspective and for ease of use. Later, many
competitors followed the lead.
End to End Solution
By 1990 Contour had assembled enough software products to offer a true cradle to grave solution
that was integrated. For the first time, when a borrower’s name was entered in a prequalification
package, it could flow all the way through to servicing. Further, mortgage companies could obtain
all of the software programs from Contour in a package called the Mortgage Banker Series.
However, not all of the modules were built internally as several were private labeled from third
parties. It was also very rare that any firm would buy the entire series of 15+ modules. Still, many
firms bought from Contour because it allowed for long term expansion regardless of how their
business grew. It was an innovative concept at the time.
LOS to Credit Interface
In 1990 and 1991, I knocked on most of the doors of the major credit reporting companies with the
hopes of building an interface. None were really interested in doing so. The reasoning was that
they received a fax of the loan application and would then fax back the credit report. Thus, the
question came back, “why would we need an interface?” Finally, a small credit reporting firm
named Chase Credit Research agreed to build an interface so that data would move via modem
(dial-up) from the LOS to Chase. When the report was ready, the report would go back to The Loan
Handler and would populate all the debts and liabilities. This was a major breakthrough and
began a long, slow adoption of moving all transactions electronically. This one interface was so
successful that it allowed Chase to grow very quickly, until the other credit vendors started to copy
The Fax Reporter was released as the first automated system that could take data and status
information from an LOS and fax it from a network fax server to fax machines. The primary purpose
of this was to send status information about loans to Realtors. Later, this was expanded to do the
same thing via email with the name changed to The Fax/Email Reporter. I believe this was also a
first for the industry.
The Loan Phone
While not much of a success, it was the first system that allowed a borrower, Realtor or loan officer
to call an 800 number and obtain status information on the loan. They just needed their loan
number and it would speak back to them details about the loan. They could also request a faxed
copy of a full status report. It very well might have been the first PC/telephonic solution designed
for our industry.
By this time, Contour had built many credit interfaces with the major players and was starting to
work on appraisal and flood certifications. Contour announced the ContourAble Network which
was an entire host of third parties that interfaced electronically with The Loan Handler. This formed
the basis for today’s LOS-based electronic transaction networks though the requirement of dial-up
lines made the system unwieldy. The reality is that it wasn’t until the widespread use of the
Internet that this invention really became feasible. Dial-up lines were slow, point to point, and very
troublesome. The ContourAble Network was the first of its kind.
The Remote Closer
This was the first product that allowed closing documents to be printed remotely such as at a title
company. It just required a copy of the software along with a modem. The data file would be
transmitted electronically through a dial-up modem. It was often used by a headquarters branch to
generate the documents with The Loan Closer and then to print them at a branch office.
The HomeBuyers Guide
This was the first PC-based software that loan officers could ship to consumers that would answer
hundreds of questions, teach them about getting a loan and finally, take the loan application. It did
a lot of what the Internet later became used for. It was fairly successful even though the consumer
had to install the software on their PC.
The Loan Expert (aka KnowMor)
I designed this product and worked with an education expert with mortgage knowledge. It was
marketed as KnowMor under a separate company name so that it could be sold to other LOS
vendors as well. It was the industry’s first PC-based interactive training software program for loan
Rules Based Processing
Contour created the first such system that would allow rules to be built around processing. A
program would then run each night to determine if any loans on the system violated a rule. Users
could build their own rules with the rule generator. Thousands of rules could be used to help
ensure everything in a loan file was done right and on time. While it was a good idea, this feature
did not prove effective as users just wouldn’t spend the time to build the rules.
Value Added Networks
VANs were all the rage as hundreds of millions were invested into them by Fannie Mae, Freddie
Mac, CPI-Alltel, MixStar and others. I wrote an article in Mortgage Banking Magazine and gave a
number of speeches stating that these networks would not take control of transactions for credit,
flood, appraisal title and other orders. Instead, they would be owned by the loan origination
systems. Well over $1B was lost to these failed systems.
In June 1995, IMX founder, Steve Fraser, called me after he read my article on bidding rooms. He
thought it was a great idea and asked a lot of questions about how it would work. He later went on
to start IMX, a company that built the second bidding room system for the industry, the first being a
system called LION. The LION bidding room was not brought to market because of lack of
The concept of a bidding room environment had been talked about for at least a couple of years
before this. However, I can’t say it was my idea (I just can’t remember if it was or not). I was the
first to write about it publicly early in this year. I can remember talking with Steve about single blind
versus double blind systems but that ultimately, I thought that the bidding room concept wasn’t
feasible. I spoke with a number of wholesalers in 1994, all of whom wanted to stay clear of being
in such an environment. As with so many other technology innovations, I’ve found that if the
technology disrupts personal relationships, it will likely fail. This proved to be the case for both IMX
and bidding rooms in general.
Web-Based Loan Application
It is not known who actually built the first online loan application as many firms were working on
this at the same time. Contour was, at least, one of the first to have an online loan application
coupled with building web sites for their customers. I believe we were the first to have the data
download directly into the LOS as this feature was there from the start.
Article: “The Emperor Has No Clothes”
I published a highly controversial article on the X12 standards highly supported by the MBA and the
entire industry. The article was buried in a SourceMedia publication but obtained more negative
feedback than any other article I had previously written (or have written since). Much had been
invested into the X12 standard by many hard working individuals. Coming out against it was
difficult and sort of gut wrenching as I had many friends that strongly supported it. When it was
published, I received a string of calls and many argued with me at the conferences. This was
somewhat pivotal as it cast me into a somewhat negative light. Still, it started the consensus
building to see X12 for what it really was. The highly positive result was the formation of MISMO
which set out to resolve many of the problems of X12 as described in this article. It took the
demise of X12 to open a door for MISMO which later became very successful.
Article of the Year Award
This was given to me by National Mortgage Broker Magazine for the cover article titled “The
Information Superhighway” in which I outlined how the LOS-based transaction networks would
take over and become widespread. It was an early predictor that the ContourAble Network and its
successor ePASS would be highly successful.
Web-Based Loan Status
Contour was the first to introduce a product called The Web Reporter that allows data and status
information from The Loan Handler to be posted for loan officers, Realtors and consumers on an
automated basis. The information was presented via a web site hosted by Contour Internet
Services (a division of Contour).
Over 250 ContourAble Partners Available
This was certainly the largest eCommerce network that existed at this time. For the majority of the
service firms, Contour was the first interface they built. We were the first to have an entire staff
dedicated to setting up communication solutions with third parties.
First Image Add-on for an LOS
Contour released the Electronic Mortgage File which allowed images to move with the data file via
modem or the Internet. This was helpful for branch operations and broker to wholesaler
communications. Clearly though, this was a solution that would take ten years before it really
became successful. Again, Contour was on the bleeding edge with this one.
Sold Contour to First American Financial
After getting to the altar with both IndyMac in 1995 and GE in 1997, I sold Contour to First
American. The primary reason was for the ability to obtain electronic orders from the Contour user
base through the ContourAble network. Ironically, after being with First American for several years,
First American’s Credco division was the only credit company that didn’t have an interface to The
Loan Handler. A few other problems arose as many of the vendors that were so supportive,
switched allegiances to Calyx after this acquisition since Contour was now owned by a competitor.
First American also wasn’t effective at increasing the sales of Contour productions through its
massive sales force. Despite this, it was great to be with such a great firm. I enjoyed being part of
their M&A team and helping direct their technology initiatives for all of First American.
Contour Processing Services
While other processing services existed at the time, this service was the first to use a full web-
based environment in which mortgage firms would enter loan applications, review all status
information and could even see imaged copies of every document that had been received or
generated. This was the first use of the Virtual Loan Folder (VLF) which is a term I coined to
describe the idea that the paper loan folder would be placed on a protected web site. I had very
high hopes for this division but it never received the funding required as part of First American, and
Ellie Mae shut it down upon acquisition. I still feel this could have been a tremendous success as
did all that were involved with it.
Contour was the first to introduce an ability to take information from the LOS and post it on any web
form. This was crucial as it allowed for rapid adoption of ecommerce or transaction processing.
For example, all a vendor had to do was to build a web site with an order form for their service and
WebIT could place all of the information directly on the form. Today, we know this type of
application on the Google Bar as AutoFill. This allowed Contour to have the most robust
transaction platform that existed at the time. I remember it distinctly as a very exciting technological
breakthrough that the competitors weren’t able to replicate for years.
Broker AUS/LOS Interface with Freddie Mac
We worked closely with Freddie Mac to bring out a solution called FAST-AU which was the very first
time brokers could use LP from Freddie Mac. We also provided the on-site installation and training
to quickly roll it out. We later received retribution from Fannie Mae for working closely with their rival.
Internet Based Underwriting from Images
A division called Contour Processing Services was built to process loans on behalf of customers.
A feature of this service was that all forms collected would be imaged and stored on a web site as
a complete digital loan package (called the Virtual Loan Folder or VLF). This was the first time a
complete digital loan package was placed online for viewing and for data access. Also as an
industry first, the mortgage insurance firm United Guarantee had their underwriters go online and
render an underwriting decision based upon the data and images stored on the Contour servers.
A number of loans were underwritten this way. This solution was eventually shut down when
acquired by Ellie Mae.
Article: “Technology Lacking Experience”
This article predicts the housing bust of 2007-2010, though it was very early on. I blamed the loan
officers and the automated underwriting systems for not properly ensuring borrowers could really
afford the loans they were getting. I also hinted at how the stock market was overvalued. Perhaps
the best sentence was “I fear record loan default rates that haven’t been seen since the 1930s”.
“Bloodbath in Six Months”
This is what I said about the Internet Portals and it certainly occurred. I’ve made a lot of predictions
over my career and the vast majority of them seem to come true.
Sold Contour to Ellie Mae
Within First American, Contour was being somewhat stifled and I wanted to build a larger LOS firm
and transaction network. I went to Sig Anderman, the CEO of Ellie Mae, who had significant
funding, and proposed that Contour and Genesis be combined together. I also provided a
business plan that outlined exactly how the transaction network would work and why the LOS was
required. Sig had previously attempted a business center to thwart using an LOS to gain
transactions. I explained and he knew by then that the business center would never work because
the LOS owned the transactions. The business plan I wrote had all the strategies for maximizing
revenue to the LOS owner and explained how each transaction would work and how much we
could charge. Later, this business plan was used very successfully with ePASS. After Ellie Mae
bought Contour and once the three firms did come together (Ellie Mae, Genesis and Contour)
there were three separate transaction platforms (Business Center, ePASS and ContourAble
Network). A big 5 accounting firm came in and decided that ePASS had the best technology. It was
the right choice and credit goes to Kami Tafreshi as the designer of ePASS. Years later, ePASS
revenues would far exceed software revenue. An interesting tidbit about Ellie Mae is that of the
$75m plus raised, the vast majority of this was spent on web site hosting and then the business
center both of which never returned much in terms of revenues.
Cover of Mortgage Technology Magazine
I was on the cover with Anthony Wright of nCommand who also won the prestigious Steve Fraser
Award that year (the first recipient). He advocated that soon, the Internet would be used for all
mortgage industry origination and transaction solutions whereas I advocated that a hybrid
approach of Windows and the Internet would serve the industry for the foreseeable future (5-10
years). His firm went out of business that same year and he wasn’t heard from again. Windows
is still used as the primary platform for mainstream loan production solutions.
Largest LOS Market Share
At its peak, Contour had 150 employees and was the largest LOS firm by market share as
determined by Wholesale Access. It also had 19 software modules that were integrated together –
perhaps the most complete line of products in the industry. There were also three services,
Contour Document Services, Contour Internet Services and Contour Processing Services. The
document service continues to this day while the latter two were shuttered by Ellie Mae.
Mortgage IT All-Stars Recipient
Selected by Mortgage Banking Magazine to the list of Mortgage IT All-Stars for my contributions to
GSE Technology Testimony
I was asked by industry leadership to travel to Capitol Hill and discuss the future impact of the GSE
technology initiatives on consumers and the industry. I met personally with a number of Senators
and Congressmen and had breakfast with Senator Charles Shumer. My predictions on how the
GSE technology could be used improperly was groundbreaking and helped the legislature place
limits on its technology advancements. My papers and testimony were the ones used for this
process (exclusively as best I know). While it’s not possible to say my work directly resulted in
changes at Fannie Mae and Freddie Mac, we did see major changes afterward. Both GSEs
backed away from plans of handling transactions related to title policies, flood certifications,
appraisals and others. Further, most R&D that went beyond its core purpose was eliminated.
Clearly, there were a lot of changes at the GSEs after my work on Capitol Hill. I was told that I was
chosen because of my understanding of the mortgage industry (and how technology works within),
my ability to communicate effectively and my ability to write persuasively. My political experience
was certainly lacking so it was a very interesting process to go through. While there is no proof, I
believe it is this testimony that resulted in Fannie Mae CEO Frank Raines absolute demand for my
dismissal from Ellie Mae which did occur (in exchange for the DU fee arrangement/contract to Ellie
Semi-retirement or Sabbatical?
Most of this year was spent in a state of semi-retirement/sabbatical though I continued to author
many articles. I spent some time thinking about the next major technological revolution for the
industry and authored an original article titled “The Ultimate Technology Solution” which was
published in Mortgage Banking magazine. I still believe that this last major revolution, as outlined
in this article will come to fruition in the years to come. Further, it is the final major technological
change that really can save everyone a lot of money.
Cooley Consulting Started
After receiving numerous requests for predictions on where the industry was headed and how to
proactively respond to what lay ahead, I became an industry consultant. There was enough
demand there to fill the hours I was willing to work. From 2003-2007, I’ve worked with over 20
clients to help point them in the right direction and provide innovative ideas that they could take to
market. I’ve consulted in many different areas of mortgage technology.
Speech at MBA Technology Conference
I’ve given speeches at most of the Mortgage Technology Conferences but this one stood out.
While it was a break-out panel, they provided an oversized room. Five minutes before the start
every seat was taken. By the start time, the crowd of over 300 spilled into the hall and latecomers
couldn’t see it. The title was, “Success Never Comes Easy – Learning from the Past and Planning
for the Future”. I provided many predictions during this speech such as the demise of the
eMortgage Alliance, the need for an eNote Registry, the over developed market for Lender ASP
systems, the pending failure of most transaction systems (except those within an LOS) and the
bright future for eVaults.
Article: “Technology and Mortgage Economics”
It’s ironic to read this article today as it exactly predicted the subprime meltdown and general
housing industry downturn. Still, I think this article was largely ignored. I was also very outspoken
in speeches and in meetings with industry executives including Countrywide CEO Angelo Mozilo. I
effectively stomped my feet at any chance I could just to try to stop the train. There wasn’t any
question that we were headed to a major crisis -- it was just a question of when. I believed so
much in this problem that I placed large stock shorts on firms like New Century. The follow-up
article in 2007 stipulates how we can prevent this from happening again.
Article on how Consumers Are Hurt by Automated Underwriting Systems
This article brings to light how the GSEs have policies in place that are forcing many consumers to
pay higher interest rates than they should be paying.
Article “Is Technology to Blame for Lost Loans?”
This article points out how automated underwriting systems could be modified to qualify more
borrowers simply by allowing multiple automated underwriting systems to be tied together. Every
consumer should be allowed access to all of the available loans.
Paper to Congress
Similar to 2002, I was asked once again to write a paper to be used in Congress in dealing with
the GSEs. Some of the original findings written are that 1) the $1000 savings stipulated by Fannie
for the use of their AUS was fabricated and that it might have actually increased costs to the
industry; 2) their move to sell third party products would likely increase the costs to the consumer;
3) the GSEs are building a consumer repository without clear indication of what they are doing with
such information; 4) the GSEs are stifling technological innovation for the industry; and 5) since DU
and LP can’t easily be used together, many consumers are paying higher costs than they should
be. I concluded with a list of recommended regulatory recommendations for Congress to adopt.
Article on Web-Based Loan Origination Systems
This article provided industry direction on the pros and cons of such solutions. Many CTOs lacked
direction on the real issues around ASP based loan origination systems.
Article: “Calling on MERS”
This innovative article calls for MERS to make changes so that the industry can begin to build the
next major revolutionary change to a centralized document and data repository. I understand that
MERS is now in the process of doing so.
Article on Freddie Mac
It had seemed that the tremendous changes within the technology arena of Freddie Mac went
unnoticed. This article brought light to how much change really occurred in the prior two years.
Article on the Subprime Meltdown
This article provides some original thinking on how technology was primarily to blame for the
industry’s problems including skyrocketing delinquency and the housing bubble. More importantly,
it implores the industry to come up with a solution to the problem in the future and also proposes a
solution that I think could work.
Dynatek Sale to MortgageHub
Served as the advisor to Dynatek, wrote the book and found the buyer for this transaction.
Ellie Mae Introduces Dynamic Loan Screening
This is an idea I came up with before Contour was purchased by Ellie Mae. It was one of the key
options available that could generate sizable income and I pushed its development when I served
as CSO at Ellie Mae. I also pitched it to lenders like IndyMac and Countrywide. It’s very powerful as
Ellie Mae controls the ability for a wholesaler to give a quote on a loan that they otherwise wouldn’t
have access to. It also has negative effects as you could upset other wholesalers in the industry
when a loan is lost to a competitor. It’s good to see Ellie Mae develop this feature and bring it to
I built this web site to keep tabs of all the mortgage technology firms that have gone out of