Magazine article American Banker

IBM, Countrywide to Offer Expert System for Mortgages

Magazine article American Banker

IBM, Countrywide to Offer Expert System for Mortgages

Article excerpt

IBM, Countrywide to Offer Expert System for Mortgages

International Business Machines Corp. is joining with one of the nation's largest independent mortgage companies to develop a system for underwriting home loans.

IBM's partner is Countrywide Credit Industries, the parent company of Countrywide Funding Corp., the 14th-largest firm in the mortgage servicing business.

The software incorporates expert systems, a form of artificial intelligence, and is designed to speed the handling of mortgage applications.

Expert systems "learn" to evaluate information by drawing from the knowledge of human experts in making decisions or recommendations.

Enhancing Productivity

Countrywide, which is seeking efficiencies to accommodate its rapid growth, believes applying expert systems to mortgage underwriting will increase productivity by 60%.

The company plans to begin using the system in January and have it in use at its 120 branches by midyear. Countrywide and IBM plan to market the system to other mortgage banking companies, commercial banks, and thrifts starting late next year.

The mortgage company, which earned $22.3 million in fiscal 1991, had a servicing portfolio of $17 billion at mid-1991, a 13.5% increase from the previous year, according to an American Banker survey. Countrywide plans to increase its portfolio to $80 billion by 1996.

More Capacity Possible

Processing applications electronically using expert systems will allow Countrywide to handle more volume without an increase in operators. …

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