SEATTLE -- Jack and Steve are the Ben and Jerry of Washington Mutual Savings Bank.
Jack A. Cornick and Steve Freimuth are senior vice presidents who golf together, live near each other, often drive to work together, and finish each other's sentences.
They are also overhauling the Seattle thrift's home-loan originations process together.
Washington Mutual is on the rise. it became the sixth-largest thrift in assets last year, up from 12th in 1992.
Much of the climb so far can be attributed to acquisition. But executives are staking much of Washington Mutual's future on mortgage lending and the loanprocessing overhaul that Jack and Steve are working on.
Innovative Software
The program will include unusual originations software that involves just about every employee in lending, said Kerry Killinger, president and chief executive officer.
Before this processing overhaul, Jack and Steve ran the thrift's mortgage lending operation together, "on the same page," Mr. Cornick said. Mr. Freimuth gravitated more toward quality control and operations. Mr. Cornick took care of the retail side of originations.
And neither Mr. Cornick nor Mr. Freimuth really wanted to take the lead in overhauling the bank's mortgage procedures.
"This is a process that can take on an awful lot of time," said Mr. Cornick, who like Mr. Freimuth stands well over six feet. Both keep their blond hair boyishly cut, though Mr. Cornick's has a sprinkling of gray.
Heads or Tails
To decide who would be the point man, they flipped a coin.
"I lost," Mr. Freimuth said.
But it seems Washington Mutual has won. With Mr. Freimuth leading the way, the thrift is well on its way to cutting its loan processing time to four or five days, bank executives said. And under Mr. Cornick's guidance, day-to-day lending operations haven't faltered.
The new loan-processing system, LoanWorks, will handle all loans, not just residential mortgages. By finding similarities in loan applications - mainly the commonality of checking creditworthiness - the new software system will eliminate much paperwork and cut costs dramatically, the thrift believes.
The systemis also designed to process loan approvals in a day.
Having a single application system is especially important for Washington Mutual, which does not operate its home lending division as a separate group. And since 30% to 40% of the bank's home loans originate at branches, employees must be able to process more than one type of loan on the system.
Better Tracking Promised
LoanWorks will allow originators to check loans at any point of application and improve customer service with improved loan tracking, Washington Mutual executives said.
It will also almost eliminate the need for the 200 loan processors and 90 closers now working.
Mr. Freimuth said, "There will be some realignment of staff. We hope we can shift staff from paper functions to sales functions."
Mr. Freimuth said a prototype of the new computer system is being used in three offices by about 15 loan officers.
"So far, they like having the computers," he said.
Too Fast for Some?
But Charles R. Richmond, executive vice president of Washington Federal Savings, Seattle, a competitor, doubts that customers really need their loans to be closed in such a short period. Mr. Richmond said most borrowers are not ready to move into their new homes in less than two or three weeks.
Loans closing within that period are "probably as much as the market is really looking for," he said.
LoanWork's prototype handles much of the application but cannot close loans. An ungraded version of LoanWorks will be installed in September, Mr. Freimuth said. By the end of this year, all Washington Mutual branches will have it, he said.
A video demonstration showed employees at various stages of the origination process accessing information on pending loan applications with relative ease. The system operates much like Microsoft Windows, executives said, and has been in production for more than a year.
The bank has no plans to market the system to other lenders.
Sees Time as Crucial
Mr. Killinger emphasized the importance of cutting down on loan processing and approval time. He said it would allow Washington Mutual to be the low-cost provider in the Pacific Northwest and maintain the thrift's dominant position there.
Mr. Killinger, who speaks forcefully, said Washington Mutual must also continue to expand its branch system, multiply its channels of business, improve its mortgage originating through home lending centers, and beef up its wholesale mortgage operations in order to remain successful.
Analysts spoke glowingly of Washington Mutual. One called it "a great little company."
Last year, residential mortgage originations reached $4.7 billion, a 34% increase from 1992. And the thrift seems on target to match that figure this year. Originations as of May 1994 were nearly identical to loan volume last year at the same time.
Aggressive Acquisitions
Washington Mutual has gained much of its market share in mortgage lending through acquisition. The most significant was the purchase last year of Pacific First Bank, which practically doubled Washington Mutual's branch network.
Mr. Killinger called it a terrific merger with a "very clean" bank that has performed "better than we had expected."
Economy Seems Solid
Loan origination outlets in retail stores like Fred Meyer department stores are also deemed crucial to Washington Mutual's mortgage-lending success. Mr. Killinger said. The thrift wants the in-store operations to be compete service outlets and has directed its employees there to be "aggressive retailers."
The Pacific Northwest is a good place for lenders to be. The region has enjoyed an improving economy, buttressed by the huge success of high-tech companies like Microsoft and migration, especially by young people, from elsewhere in America, said Paul Sommers, executive director of the Northwest Policy Center, the research arm of the Univeristy of Washington's School of Public Affairs.
But Mr. Sommers said Boeing Corp., the aerospace giant, holds the largest key for the region's economic and loan-originations success. Renewed layoffs at Boeing would upset much of the Pacific northwest's economy.
Jack and Steve think LoanWorks will equip Washington Mutual well for the region's future lending needs.
After talking about the system in a board room overlooking picturesque Puget Sound, they sat back almost simultaneously in their leather chairs.
The discussion turned to golf, and they were again finishing each other's sentences. Jack said Steve hits a golf ball farther, but Steve pointed out that Jack is the better putter.
Together you would probably make the ultimate golfer, suggested Roger Nyhus, then a bank spokesman.
"Yes, I guess we would," they said. And they both laughed.
