and automation is clearly one of the key business strategies helping to spur the change. Technology vendors are working with mortgage banks and other lending institutions to manage these changes by developing electronic solutions to increase efficiency. The challenge of providing more enhanced services in a shorter time frame requires companies to add technical personnel. At the same time, these companies are streamlining internal functions, with the goal of enhancing their customer-driven philosophy. The latest demand dictated by the mortgage industry is monumental and will forever change the nature of its relationships with vendors. The development of new and faster technologies won't simply redefine the relationship between the parties; it will totally change the players involved, because companies that are unable to meet the new industry standards will simply not survive. The lending community is on the cutting edge of technology, and looks to its suppliers to provide faster service through sound technological advancement. Financial institutions are being urged to process loans more quickly. That requires their outside suppliers to deliver quality products and services in a more timely manner. This revolution in technology and time management is occurring in the residential mortgage market more than the commercial mortgage market. The reason: Home mortgage lending is more standardized in its underwriting and funding requirements. In commercial transactions the requirements are usually customized, most often on a deal-by-deal basis. Because the residential lending process is standardized, it is much more compatible with automation. Time is the basic underlying factor that has created changes in the lender-vendor relationship. It used to be acceptable to process a loan in approximately three weeks. Now to stay competitive lenders must strive to process a loan in two or three days. If they do not originate faster, they could lose the loan to a competitor. As a result, lenders and their suppliers are working more closely to build stronger relationships to reduce processing time and administrative costs and increase the likelihood that these loans will be funded. There are additional factors spurring lender-vendor changes. The forces include competition to fund a loan, costs, and secondary-market agency requirements. Secondary-market agencies are pushing for changes to drive down overall costs for processing loans. With intense competition the rule of the day, it becomes increasingly important for lenders to be prepared. Those taking a proactive approach to offering advanced technological services will be in the forefront of their market. Those that are not forward-thinking will stagnate and eventually lose their competitive ability. To create the ultimate technological solutions for this industry, vendors are working to form long-term partnerships with financial institutions. This will affect vendors that may not have the resources to meet the needs of lenders in these changing times. The companies leading this movement are developing centralized systems so they can service financial institutions through electronic linkage capabilities. For example, through automation, title insurance companies receive orders and deliver policies directly. Title insurance companies and others are trying to spearhead this technological movement by creating the ultimate solution - to offer multiple products and services at the point of contact. For instance, companies will need to adopt a one-stop-shopping system, where they don't simply supply one type of service, but they continue to create products and services for all of their lenders' needs. These needs are varied, encompassing title insurance, tax, credit, flood, and home warranty services. As the financial services industry evolves, those working with it must also evolve. It is important for vendors to note that when dealing with this industry, they must be progressive, proactive, and responsive. Mr. Gilmore is vice president and director of Lenders Advantage, a division of First American Title Insurance Co. He is also senior vice president of the tax services division of First American Real Estate Information Services.

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