Academic journal article ABA Banking Journal

Getting to Total Quality with "Six-Tistical" Approach

Academic journal article ABA Banking Journal

Getting to Total Quality with "Six-Tistical" Approach

Article excerpt

It's been years since GreenPoint Mortgage, Novato, Calif., began to weave quality processing into the fabric of daily operations.

Now, as the national mortgage banking company updates its origination, closing, and underwriting environment to achieve straight-through-processing (STP) linkages and reduce paper, it continues to rely on a series of Six Sigma-inspired applications from its San Francisco-based partner, Cogent Economics, for insightful quality control analysis.

Four Cogent quality control products ProductionQC, PipelineQC, ServicingQC, and ComplianceQC are used by GreenPoint to generate a more useful and accurate statistical picture to pinpoint both the rate and sources of error.

Each was put into place as the Savings Bank gradually introduced its quality program, starting just after its acquisitions of Barclays American Mortgage Corp. and Headlands Mortgage in the mid-1990s.

The idea behind use of the tools is progress--not perfection. "Six Sigma [the quality control program developed by Motorola] is a good practice for us because you aren't just chasing after less error in process for its own sake," notes Mike Ellis, GreenPoint Mortgage's vice-president of quality assurance. What he liked about Cogent was that it made the esoteric practical at a time when Six Sigma was realty only being used, and understood, in the manufacturing and healthcare industries.

In general, there wasn't much guidance about how to hit the Six Sigma benchmark of 3.4 defects per million opportunities.

At the same time it was trying out an ambitious program of improvement, Greenpoint was coping with its growing pains. "With dramatic expansion," says Ellis, "comes the need to meld disparate cultures and adopt uniform processes." One aspect of the challenge, initially, was that Headlands had long incorporated a post-funding reviewing process, while the more conservative (and originally smaller in origination volume) Greenpoint was used to pre-funding reviews. …

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