Automated underwriting has come into its own as an effective tool for mortgage originations, lenders said at a conference here.
An automated system is helping NationsBank revolutionize its mortgage originations program, said Jo Cameron, vice president of NationsBank Services, which oversees the underwriting system.
The system, in addition to quickly underwriting loans, can solve problems and serve as a customer service guide, Ms. Cameron said.
She made her comments during a technology conference here sponsored by the Mortgage Bankers Association of America. Ms. Cameron and other bankers were speaking at a session hosted by PMI Group, the mortgage insurer that developed the underwriting systems the banks are using.
NationsBank signed a contract for the program a year ago and gradually rolled it out to 500 loan processors and underwriters. "It doesn't happen overnight," Ms. Cameron said. "It's a significant project within your organization."
Loan officers were trained on the system over several months.
When put to best use, such systems cut down on the time - and cost - of processing applications. "We're able to handle things much earlier in the process," Ms. Cameron said.
The program also allows lenders to "improve productivity and work process flow," said Carolyn Hart, senior vice president at BancBoston Mortgage Corp.
The system allows BancBoston to process loans in 15-day lots, instead of 30-day or 60-day lots, thereby improving the company's secondary marketing operation, Ms. Hart said.
Shelter Mortgage Corp., in Brown Deer, Wis., is using the automated underwriting system as the backbone of its Fast Lane Loan program. "The program can quickly approve an application subject to a property appraisal," said Del Jaunchowski, vice president of operations. "It's a new way of doing business," Ms. Jaunchowski said. "If you can close the loan within 15 business days instead of 45, that's a customer benefit."
The system also provides flexibility, Ms. Jaunchowski said. It can "flip-flop" programs, allowing applicants who are turned down to see quickly if they qualify for another loan, she said.
Systems like the kind that NationsBank installed can cost $400,000 to $600,000. Components of the system can be purchased individually for as little as $20,000, a PMI spokesman said.