Lomas Mortgage USA counts itself lucky that since 1987 it has spent over $4 million on one imaging technology system. In fact, it wishes it could spend even more money.

This may sound reckless but is actually far from it. Lomas' spending has helped it to save money.

"We've more than recovered our investment," said Russel Young, a senior vice president who heads Lomas' imaging system. "Imaging has clearly helped boost out profits."

"Mortgage servicing is one of the most paper-intensive businesses in the financial services industry," said Mr. Young, "As a result of the technology, we've been able to reduce our paper load and improve the bottom line. I wish I had more money to convert more business lines to imaging."

In 1987, Dallas-based Lomas, which had 635,000 mortgage loans in its portfolio, paid $800,000 for FileNet's initial imaging technology. Through several upgrades and conversions, Lomas has invested $4.2 million in imaging, according to Mr. Young.

Big Cut in Payroll

Referring to return on investment, Mr. Young specifically points to Lomas' massive central payoff division, where an imaging system enabled the company to reduce its work force from 46 people to 32.

"That alone saved us $1.5 million," Mr. Young said. "In addition, over the time period in which we installed imaging and reduced the work force, our central payoff portfolio grew by 40%."

Though he gives imaging high marks across the board, Mr. Young concedes there have been a few hurdles in integrating the technology throughout the company.

"Our main problem has been getting people to recognize the benefits of the new technology. But once we started initiating the system, they saw the benefits and its acceptance blossomed."

Another problem has been the overall cost of switching every division to image technology.

Conversion Not Total

"It's hard to justify a back-file conversion when I fully know that over 75% of the files will never be pulled," Mr. Young said. "While it would be nice to convert the back files, we have financial pressures, like everyone else."

As a result of those pressures, Lomas has converted only some of its mortgage processing divisions.

"We've focused on applications that are most labor-intensive, such as central payoff, hazardous insurance, and, most recently, foreclosures," Mr. Young said.

Impact Is Broader

Mr. Young noted that today, for example, Lomas' hazard insurance division is completely paper-free.

"It's hard to argue with results like that," he said.

Paper isn't the only casualty of imaging at Lomas. The technology has also enabled Lomas to reduce its dependency on microfiche.

"With microfiche, we constantly had to pull the fiche and make hard copies," Mr. Young said.

Other Applications

Now, with its computers and laser printers, Lomas' operators can almost instantly retrieve the customer's account history on a computer screen and churn out hard copies at breakneck speed.

"We're one of the few people who have converted away from microfiche," Mr. Young said. "We're very pleased with the result."

Lomas hopes to widen the use of imaging technology to other applications.

"If it were up to me, I'd have every function switched to imaging as soon as possible," Mr. Young said. "These things, though, take time and money. Nonetheless, imaging technology clearly is the direction we have moved to and continue to go with."

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