The nation's largest banks are offering sweeping modifications on millions of mortgages. Bank of America, JPMorgan Chase, and Citi alone have promised to restructure 1.3 million more loans.

But how efficiently loans can be reworked will depend in part on how heavily institutions have invested in loan technology, and how easily the systems can accommodate new rules. If all those origination documents are in manila folders in the basement, restructuring half a million loans will be a long slog. "For lenders that are electronic, it's a large effort, but something they can get done in two-to-three quarters," says Dain Ehring, CEO of lending technology leader Dorado. "If they're not electronic I think it's two-to-three years."

There'll be no digging through manila envelopes at JPMorgan Chase. The bank has long had its own enterprise content management system-it used to be called a digital archive-that allows electronic access to loan origination documents in seconds, says Joe Stark, executive director of DocManager Solutions.

In Citi's case, the bank has pledged to reach out to "at risk" customers based on what the bank knows about falling property values and unemployment rates in given areas. Utilizing this kind of data might be called redlining during origination, but is allowable, and valuable, in this scenario. "Everybody is now doing default management," Ehring says. "Now you can legitimately use zip codes and say, 'I'm looking for valuation changes.'"

Banks are likely to need significant coding work on loan servicing systems to handle restructuring standards. "There will need to be system changes to identify and track specific programs under which loan modifications are made," says Craig Focardi, director of banking research at TowerGroup.

When the mortgage industry rebounds it will look vastly different from the one that imploded this year, with shifts in both the biggest players and the technology they utilize. "A lot of the systems in place are old systems for an old market," Ehring says. "This is mortgage 2.0. It is totally different."

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