PMI Mortgage Insurance Co., San Francisco, has signed agreements with two major mortgage lenders to begin transmitting information via electronic data interchange, apparently the first private mortgage insurer to establish EDI links with lenders for claims processing.

EDI is the automated exchange of corporate information and data.

Countrywide Funding Corp., Pasadena, Calif., and PNC Mortgage, Vernon Hills, Ill., will transmit mortgage-insurance transaction sets and notices of claims to the insurance company. The mortgage lenders and insurer have completed successful tests and are now installing communication links.

Officials said the new system would be more efficient and would reduce errors. Harvey Syverson, vice president Of PMI, said claims processing, which can take as many as 60 days using conventional paper-based communications, "can be completed in hours, assuming that the lenders have provided all the paperwork."

The mortgage industry's use of electronic data interchange has dramatically increased in recent times, Mr. Syverson said. Companies are realizing the benefits and are overcoming their reluctance to invest in the new technology.

"EDI is starting to gain a lot of momentum in the mortgage industry," Mr. Syverson said. He said because the mortgage industry had been slowing in recent years, it had become "a business imperative to give value-added service to borrowers to provide loans faster and to save money."

"Mortgage companies have been slow to catch on to the paperless environment," agreed Paul Lindemann, assistant vice president with Countrywide. "It's high time something like this is happening."

In a related development, Countrywide, which services more than $100 billion in mortgages, is also in a pilot program of using EDI to transmit conveyances - the transfer of a property's title - back to the department of Housing and Urban Development when a mortgage defaults. Officials with Countrywide anticipate going live this week.

PMI's system, called Paperless, requires an electronic mailbox that transmits information over the Advantis value-added network. The companies expect substantial savings from less faxing and mailing.

PMI is a subsidiary of the Allstate Insurance Co. and is the third-largest mortgage insurer in the United States. The company became EDI capable in February to handle the American National Standards Institute's X 12 formats developed and approved by the Mortgage Bankers Association and Mortgage Insurance Companies of America last year.

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