Fleet Unit Aims to Leapfrog Rivals With $40M for Mortgage Automation

Fleet Mortgage Group, long a dinosaur in mortgage technology, is investing $40 million on automation in an attempt to overtake the competition.

The process started last year when Fleet hired Andersen Consulting to develop software and computer systems, first for the origination process, then for the processing and servicing departments.

Fleet, the nation's fifth-largest mortgage originator at midyear, held on to traditional origination methods long after its competitors had turned to laptops and specialized software.

But Fleet executives argue that because it is one of the last major mortgage lenders to automate, the unit is taking extra measures to catch up with and surpass the competition.

"If we don't do it, we won't be in business," said Jerry Baker, chief executive of the unit of Fleet Financial Group. Fleet Mortgage racked up a little more than $5 billion in originations in the first half of 1995, compared with almost $14 billion in all of 1994, and appears headed for only a modest decline for the year, pretty much in line with other major lenders.

"We are a mortgage company that plans on growing a lot," said Fleet Mortgage president and chief operating officer Robert Golitz. He wants the company to expand into new wholesale, retail, affinity, and telemarketing arenas, and a computerized system is the integral to that process.

This year, the company expects to do a little more than $15 billion in originations, Mr. Golitz said. That figure should climb to $20 billion in 1996, and $30 billion to $35 billion by the end of the decade, he added. A key factor in the growth will be the increased efficiency of computerized systems.

In fact, Mr. Golitz said, the automated system represents the first step in the technological push that Fleet will be making in the next two or three years in an effort to maximize the company's capacity for expansion and to build on its reputation for customer service.

"As we see our growth opportunities, we are committed to making a substantial investment in technology," he said.

Additionally, the company is going on-line in the beginning of 1996, with a site on the Internet's World Wide Web.

Mr. Golitz said he expects to keep on staff members who otherwise would have been put out of work by the new systems to cope with increasing volume.

The new front-end origination system will be rolled out to loan officers in February 1996, Mr. Baker said, and to the processing staff in the middle of the year. The system should take most of 1996 to implement, he said.

Loan officers will be provided with laptops to enable them to enter information directly into the system.

Andersen Consulting engineered the origination system "with the customer and loan officer in mind" rather than adapting it from an existing processing system, Mr. Baker said. "It's more flexible."

In fact, by delaying automation until now the company can develop a new system using all the currently available interfaces, Mr. Baker added. "We have the benefit of some of the newest technology involved with the creation of software," he added. The Fleet system will be more "robust" than it could have been had the company begun automation years ago.

The decision to use an outside firm to develop the software, rather than purchasing an existing originations package, followed an extensive but futile search for a system that would fit all of Fleet's needs, Mr. Golitz said.

Traditionally, purchasing an existing software and networking system "off the shelf" has meant some cost savings. Mr. Golitz concedes the $40 million price tag "wasn't cheap," but says company officials knew what they wanted from a system. Fleet expects the system to pay for itself in less than two years through increased efficiency and decreased paperwork.

The system will allow Fleet to hook up with Fannie Mae, Freddie Mac, and other companies that have existing loan underwriting or insurance systems.

"We want to make sure that the architecture of the system is open, to enable complete interchange between ourselves and our partners," Mr. Baker said.

In addition, Fleets in-house systems experts are working with Andersen Consulting to develop the software. Later, should the systems require further customization, Fleet's systems department would be able to make any modifications.

Fleet's merger with Shawmut Bank will mean that Shawmut's DOS-based system.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER