Mortgage companies are increasingly using technology to shave costs, but some are not reducing or shifting staff to maximize savings, a new survey showed.

Departments that handle failed loans appear to be ripest for staffing adjustments, according to a newly released survey by Alltel Information Services, Jacksonville, Fla.

For instance, the expense of processing a foreclosure more than doubled, from $822 in 1995 to $1,799 last year, when lenders handled fewer delinquencies but kept staffing relatively stable. In the same period, the cost of handling loans involved in bankruptcies increased from $263 to $266.

Alltel released preliminary survey results last week during a conference for clients and vendors in Orlando. The mortgage technology company does the survey annually with an eye toward helping lenders adjust staffing needs while stepping up automation, said vice president Joan Davis.

The 1996 results are based on responses from 59 mortgage banking clients whose loan portfolios range in size from under 8,000 to more than 200,000. Participants included Chase Manhattan Mortgage Corp., Norwest Mortgage, and PNC Mortgage Corp. The survey did not break out individual responses but grouped them according to portfolio size.

The survey found that some lenders turn over their servicing portfolios as often as twice a year, looking for profit opportunities from aggressive sales and purchases, said Joe Witcher, an Alltel staff consultant.

Mr. Witcher also said that more lenders were getting into the subprime business - and finding it takes three or four times as many employees to handle collections.

The survey also found that the cost of fielding a customer inquiry rose to $4.08, from $2.88 in 1995.

This increase is not necessarily a bad development, said Alltel consultant George Fitzgerald. By spending more time with a customer up front, a company can avoid repeat calls, he said.

In general, loans backed by Fannie Mae and Freddie Mac are the easiest and least expensive to service, said Dan Brenenman, a manager in the Alltel consulting group. "Plain-vanilla portfolios tend to have higher loan-per- employee values."

Larger servicers tend to be more efficient than smaller companies because of economies of scale. But big companies also show poor numbers when they have a significant amount of excess servicing capacity, Alltel found.

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