At the height of the 2003 refi boom, Olympia, Washington-based Washington State Employees Credit Union
(which now calls its mortgage lending subsidiary One Washington Financial), waded through a flood of business
with MortgageWare as its LOS. When IT manager Ken Telloian learned that Interlinq (now Harland Financial)
was no longer going to be supporting MortgageWare, he started looking at other LOS systems.

He also sought something that would run on a non-Microsoft platform because OWF was frustrated with the
frequent need to reboot with their Microsoft Web server. Mr. Telloian said the only LOS he could find that would
be compatible with an open-source platform was Middleburg Heights, Ohio-based Associated Software
Consultants' PowerLender. "That was important to us because of Web deployment,” he explained. "We would
want to be able to run on something like an Apache server, which is more secure and dependable than the
Microsoft Web server.”

Doing some pioneer work in business-rules technology, ASC's first flagship product was a front-end system
called UNI-FORM, which handled the loan process from the time a borrower inquires about a loan until the time
they sign closing documents. "UNI-FORM was a very capable front-end system, but the technological
underpinnings became fragile and unsupportable. So we set about rewriting it, and came up with a product
called PowerLender;' said ASC's Tim Liston.

ASC laid out three goals in developing PowerLender: first was to retain the business rules strengths of their
UNI-FORM LOS, second was to futureproof the system by using open source technology and third was to
enable users to select the virtually free infrastructure components available in the open-source market.
PowerLender’s flexibility in mating with various platforms coupled with its business rule prowess comprise what
Mr. Liston refers to as "functional and technical extensibility.” He stressed that the basic premise of this
approach is that we can't know what work systems will have to do five or 10 years out, or what technologies will
be available.

"So, in order to future-proof the systems that you put in, you want them to be able to change in two regards.
First, they have to be able to adapt to changing business requirements, which is what I call functional
extensibility. And, you also want a system that, in the face of changes to your technical environment, can adapt
to those sorts of changes as well,” he said.

In describing OWFs implementation process for PowerLender, Mr. Telloian drew an analogy from real estate.
"Out here on the West Coast, there are some houses you can buy that are new construction, that are basically
the shell of the house, and you finish the inside. And that's kind of how I look at PowerLender. You get kind of a
basic shell and then customize it to your business applications. So, it's workable the way they deliver it to you,
but you're going to want to set it up how your workflow works.”

OWF's working estimate was that with a team of two or three people, they could set up PowerLender in three months. But not during a refi boom. "We knew going into it that it probably wasn't the ideal time to be implementing a new system, when you're at peak levels in originating. It probably took us about five months to do,” recalled Mr. Telloian.

PowerLender has all the capabilities of any good LOS today. It allows the entry and validation of borrower and
loan data, performs any calculations, prints any form, controls workflow, generates any report and shares
information with third parties. Because it allows extensive customization to suit the mortgage shop, all aspects of
loan programs, document preparation and processing reflect the requirements of the user.

Also, the user can alter and adjust business rules without programming. Because PowerLender is compatible with a variety of proprietary and open source operating systems and databases, the user can mix and match these in its decentralized, neutral environment.

Written in Java to operate on the J2SE platform, it is a rich-client system, with user customizations and data maintained separately, hence, periodic updates, or migration from one component to another, do not affect them.

Programs reside on local servers and laptops, making for faster operation and easier data entry and validation, since a browser is not required. The Java script not only opens the door for the IT manager to fashion screens and fields, and work flow logic, it also enables the use of MySQL and RedHat LINUX, which are nearly free.

Upgrades ate handled by either ASC or IT staff at One Washington Financial. For example, ASC delivers upgrades that involve the core program, while OWF IT staff handle most others that other vendors would have to send out. "Sometimes, as with XML conversion with Fannie Mae, each shop had to do their own, because our business setup is completely different,” said Mr. Telloian.

The ASC implementation package comes with a loan module sporting fields, screens, forms, reports, tables, etc., which the lender can then customize. Then the fruits of customization can be automatically deployed to remote sites, such as branches and laptops.

The system also features a "Sticky Notes" conversation log, for recording conversations, to-do tasks, and followups
at any point in the loan process. Each Sticky Note entry records the date, time, operator and even the
screen from which the note was submitted. Sticky Notes create a "complete paper trail that can be reviewed,
stored and printed – an important feature for Sarbanes-Oxley audits.

Because PowerLender has a modular design, non-programmers can add loan plans, forms, screens, workflow
configurations and other features to the system, without affecting software programs or data. PowerLender’s
architecture allows it to automatically communicate application files, business rules, including loan pricing, and
even program enhancements (free under ASC's System Support Agreement).

In adding up the total cost of owning PowerLender, Mr. Telloian pointed out the need to upgrade legacy
infrastructure, which is true with any LOS implementation. He said the LOS itself was certainly the largest bite.

"Depending on how many users you have, so I'm going to spin maybe 50 people, you're talking a minimum of
$50,000. I don't care who you're buying from, or what product, they're all in that range. PowerLender was
competitively priced - they weren't the lowest or the highest. They were in the ballpark with everybody else."

Beyond the outlay for the LOS, the cost depends on the state of the enterprise's infrastructure. An LOS requires
servers adequate to leverage the new system. "If you're running an old system, and you haven't done much
server-wise in several years, you're probably going to want to buy a new server;"Mr. Telloian stressed to those
looking to make this change.

"So I think for us, we did spend some more money there,” he recalled, "because, while the meter's running, let's
get everything state-of-the-art. We did do some hardware changes that probably didn't have to be done, but we
just figured let's do it right while we're doing it.”

As stated earlier, a lot of the appeal of PowerLender was that it allowed access to the open-source operating
systems and databases, which meant less rebooting on none of the security problems and memory leaks
associated with Microsoft.

"Basically, with our LINUX server, we wouldn't even have to reboot, but we do probably once a month, just
because we're installing security updates about once a month. With our Microsoft server, we were installing
security updates about twice a week, sometimes more,” said Mr. Telloian.

“But as far as the memory thing, and rebooting the server -even if we weren't doing security updates -we would
probably be doing at least weekly reboots to your servers, even without having to patch,” he pointed out.

Mr. Liston concurs, “The open-source model that underlies LINUX, you see, is able to grapple so much more
effectively than Windows. You have a lot more people that are looking at it and working with it all the time, so it
is inherently more secure than Windows. We see, even this week, this new exploit that everyone is so fearful of.

Microsoft spent 10 years doing nothing about security, and some of the stuff is now coming back.” An opensource
program can be used and/or modified by the general public free of charge.

Open source programs benefit from the collaborative work of a community of programmers free of proprietary or
financial concerns. In the end, a peer-reviewed program emerges typically free of bugs, due to the scrutiny of
the community. Businesses availing themselves of open source benefit from this fount of impartial engagement.

OWF's average size loan is about $130,000. Mr. Telloian figures that the PowerLender LOS cuts from six to 10
days off the production of a loan, over their previous LOS, MortgageWare. The lower figure - six days -
corresponds to about $250 per loan, or a quarter point on a $100,000 loan.

"I look at the number of days and that's like a labor thing, because the Feds make us come up with a number
that we use - the cost to generate one loan - and so if you take that number and figure how many days it takes
to close a loan, and divide it out that way, that's how I'm arriving at these numbers,” he said. "So if you're a shop
that does 3,000 loans a year that's $750,000.”

But the cost-per-loan savings, based on a quicker turnaround time, is only one piece of the ROI. Since Mr.
Telloian managed secondary marketing for a long time, he remembers the costly mistakes that happen in
delivery. Basically, loan reps change the terms of the loan after it's been locked. When the company delivers a
loan to Fannie Mae that’s outside the delivery window, it could mean several thousand dollars loss on that one
loan. “And that does happen more frequently than people realize,” he explained. "Now we can write these
business rules that won't allow those types of things to happen.”

Being able to set up such safeguards in PowerLender's business rules component makes the difference. Mr.
Telloian said that there's no way to quantify the savings, only that he knows it used to happen too often.

The rules allow the processor to make little changes, within tolerance, but blocks any changes by another tier,
such as loan reps. If the processor goes beyond tolerance, the system will give them an error message. If they
want to override it, they have to go to secondary. "Which is what they should do anyway.” he said.

Like other lenders, One Washington Financial doesn't want to rip out and replace systems again in a few years
or be at the mercy of the vendor to keep up with innovations.. OWC already had the experience of depending on
an LOS vendor that developed only at the pace demanded by the majority of its customers.

Mr. Telloian said the usual response back from vendors to requested changes is, 'If you're the only one
requesting it, we probably won't do it. We're going to have a fairly large number of our customers out there
request it, and then it'll go to the drawing board, blah blah blah, and maybe a year from now you might see
something.' Today One Washington Financial has no qualms today about not being in stride with the prevailing Microsoft .NET parade. Mr. Telloian said the flexibility of PowerLender -the ability of the user to configure changes - is a big plus at a time when the mortgage industry is getting more dependent on technology every day.

"When you look out the next three, five, seven years, it's going to be really incredible. We'll probably be close to
paperless by then,”' he said. "With PowerLender, because they give you so much flexibility in enhancing things,
it's really 'the sky's the limit', and it's up to us to keep the product at the level of technology that's out there now.
If somebody comes out with an LOS next month that does something I can't currently do with PowerLender,
most likely I can make it do It, because there's enough flexibility there.”

PowerLender is a state-of-the-art loan processing system that helps you originate, underwrite, process, close and fund mortgage and consumer loans. PowerLender can easily process conventional conforming and non-conforming loans, FHA, VA, construction, refinance and consumer loan products. PowerLender is equipped with all the software necessary to enter loan data, calculate and print forms and reports, manage workflow, and interface with third parties including Fannie Mae and Freddie Mac.

About Associated Software Consultants
Associated Software Consultants, Inc. (ASC) designs and markets the PowerLender Loan Processing System and the PowerSeller Secondary Marketing & Pipeline Risk Management System for use by mortgage banks, commercial banks, community banks and credit unions.

ASC’s business strategy focuses on providing software and support services that enable lenders to improve the volume and quality of their business, streamline workflow and reduce costs. The company’s lending solutions enhance primary and secondary mortgage operations, improve overall profitability and better serve borrowers, investors, real estate brokers, third-party service providers and other constituents.

Associated Software Consultants, Inc.
7251 Engle Road Suite 300
Middleburg Heights, Ohio
800-628-4687
www.asconline.com info@asconline.com