Despite sharply increased volume in adjustable-rate home loans, thrifts are processing mortgages without delays -- and, in some cases, with increased speed.

Adjustable loans, a thrift specialty, made up 46% of the lending market last month, a five-year high, according to the Federal Housing Finance Board.

But bankers say the increased adjustable loan activity has not strained processing units.

"Any lender fight now can take on more loans," said Janice L. Denny, vice president, California's Sacramento Savings Bank.

"Volume is hard to come by, so we have capacity left. There is no strain at all," said Sam Lyons, senior vice president of Great Western Bank, Chatsworth, Calif.

Sacramento Savings Bank's Ms. Denny said home-loan production today is not as voluminous as it was during the recent refinance boom, despite increased adjustable loan activity.

Mr. Lyons said Great Western has been able to speed up its loan processing now that it is originating more ARMs.

"I think it is more difficult for ARMs to be processed by someone who is less experienced," he said, "To us it is second nature."

Many thrifts are now taking the opportunity to streamline their processing operations, Great Western among them. Mr. Lyons said the bank was moving toward a centralized, hub-and-spoke processing system. The change should be completed by the end of next year.

A new, streamlined processing system at Hudson City Savings Bank, Paramus, N.J., can give customers final loan approval within two weeks.

At Great Western it takes about 30 days, though Mr. Lyons said the bank could accommodate any processing time request.

Hudson City has been able to speed up its processing by asking customers to provide more of their documentation up-front, said Thomas E. Laird, first vice president.

Mr. Laird said processing adjustable-rate loan took more time than conventional fixed-rate loans because the maximum adjustments must be calculated and underwritten for. He said some thrills that reduced production staffs after the refinance boom may face difficulties handling today's adjustable loan volume.

But as of now, he said, volumes are not high enough to trip up thrifts' processing operations.

Joseph P. Blonigen, senior vice president of First Financial Bank, Stevens Point, Wis., said processing speeds depended largely on third-party vendors, like credit reporting agencies and appraisers.

Mr. Blonigen said alternative forms of documentation were speeding up processing times markedly. And they will continue to do so.

"Delays in the last two years won't repeat themselves," he said. "We are all going to learn from that experience."

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