United Companies Financial Corp. says it has fully installed Millennium software from Gallagher Financial Systems Inc. in Ginger Mae, its bank referral unit.
Baton Rouge, La.-based United, a subprime lender, also is overhauling the software at Unicor, its wholesale division, according to Norman Danford, United's manager of software services.
United predicts all Unicor offices will be converted by the end of 1999. Together, Unicor and Ginger Mae have 175 branch offices.
United, which originated $2.5 billion of subprime mortgage loans in 1997, began converting its workstations last June and began using the system in December.
So far "it's going fine," said Mr. Danford. Whenever software applications are changed, there will be some bumps, he said, adding that convincing employees to accept the new software takes time. "People don't always like change," he said.
Gallagher's number of subprime clients is increasing, said Douglas Gallagher, president and chief executive. These lenders are experiencing "more technology needs and requirements," he said.
"The old-fashioned way of underwriting on a case-by-case basis no longer works," he said. "Technology is going to be an increasingly important part of how lenders are able to compete-it's much more difficult to do analytic review or evaluations without sophisticated technology."
Gallagher has also recently installed the new software at Saxon Mortgage Inc., a Glen Allen, Va.-based subprime shop.
Mr. Gallagher said his company has about 80 active clients, and that subprime companies are attracted to the software's flexibility.
Gallagher Financial of Coral Gables, Fla., said Millennium software lets lenders qualify borrowers, originate and process loan applications, close and settle loans, and track them in a lender's pipeline.
United has used Gallagher's DOS-based product for two years, making the switch in part because the software can be tailored to fit the company's needs, Mr. Danford said. "We have the ability through the developer's tool kit to modify or put in place dialogues we want," he said. "We've done a lot of edits," particularly to adjust for the variety of state regulations, he said.
Gallagher charges clients an annual licensing fee and a fee per number of end-users for its software system.
Mr. Danford declined to disclose what the transition has cost United but said that the tab for upgrading a software system "can be significant." But upgrading to the Windows software pays off because it eliminates downtime and makes back-end functions more reliable than with the DOS-based product United had been using, he said.
"You're able to do many more things for your own organization," he said.
United has expanded its information systems department significantly in the past two years, Mr. Danford said. "We're trying a lot of new things, and a lot of new technology. You can only modify older technology so much," he said.
