Washington Mutual Inc. on Monday announced a partnership with two technology firms to develop an automated mortgage process that it said would let it double its lending volume without increasing staff.

The $187-billion asset Seattle thrift company said it is working with GHR Systems Inc. of Wayne, Pa., and Framework Inc. of Tarrytown, N.Y., on what some observers said would be the next phase of competition in the mortgage industry: a race to develop automated loan approval systems that link the Internet, branches, and other mortgage-origination channels to a single back office.

"Our strategy is to make it as easy as possible for the customer to access Washington Mutual, regardless of the channel they come in," said Craig S. Davis, president of its mortgage banking and financial services groups. "We want to compete with both online and land-based companies, and we feel this will be a winning strategy."

Several top mortgage lenders have tried to develop such automated loan processes, but the task has proven a bigger challenge than expected. According to Gomez Advisors, only Countrywide Credit Industries' mortgage unit can be counted as a "clicks and bricks" lender.

"Up-front preapproval is only part of the story," said Nick Karris, a senior analyst at Gomez Advisors in Lincoln, Mass. "There is also the back-end, 24-hour loan status tracker - and you have to have it."

Mr. Karris said a fully integrated system would be the minimum ante to compete effectively in the Internet space. Lenders will have to offer current rates, preapprovals, and rate-locks, and customers will demand 24-hour tracking of a loan's status.

The system Washington Mutual is contemplating - called Optis - will be a mortgage origination and decision platform through all distribution channels, officials said.

"Whether a customer comes through Internet, call center, retail shop, or wholesale, they will be on this system," said Stacey Arens, a senior vice president in Wamu's mortgage banking and financial services groups who has been overseeing the project. She said Optis would be accessible by employees, brokers, realtors, correspondents, and borrowers 24 hours a day.

"Most of the technology that exists today is not highly automated," said Cy M. Brinn, president and chief operating officer of GHR Systems, "and it requires a high level of manual labor."

Mr. Karris said Gomez's scorecard of online mortgage lenders includes only one bricks-and-mortar mortgage company: Countrywide, which he said is leading the field. Richard Jones, chief technology officer for Countrywide's e-business division, said the company has been involved with the Internet since 1993 though its Web operation was "just a brochure" back then.

Today, however, Mr. Jones said, his company's system lets customers process a loan any way they want - exclusively online, in a branch, through the call center, or a combination of two or all three of the channels. "We're already tracking the process, so we tap the database and put it on our home page so the customer can see where he is in the process," Mr. Jones said.

For Washington Mutual, GHR Systems will supply front-end technology, such as automatic qualification, underwriting, product selection, and pricing, and Framework will track and drive the loans through to closure. The collaboration is the first between GHR and Framework, but officials at both said they would like to repeat it.

Mr. Davis said Optis would let Washington Mutual double its current loan volume of about $40 billion a year, adding efficiency and streamlining the process without adding staff. Washington Mutual officials said the system would give the company the ability to say "yes" to more borrowers; Optis would approve many loans, freeing up the company's loan officers to dedicate more time to applicants whose loans are not approved immediately.

Noting that Washington Mutual is one of the top portfolio lenders, Mr. Davis said it is seeking to expand other parts of its business. "Our goal is to be as strong in the mortgage banking area as we are in portfolio," he said. "This system is one tool we need to reach that goal."

Washington Mutual officials said that during the mortgage slump of the last 18 months, the company's numbers have held up well, including gains in key areas. Net income increased 22% in 1999, to $1.82 billion.

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