Imaging Means Better Service, Smaller Staffs; Countrywide Credit Is Beating Back a Rising Tide of Mortgage Paperwork
Levy, Adam S., American Banker
Countrywide Credit Is Beating Back A Rising Tide of Mortgage Paperwork
Four years and $3 million ago, Countrywide Credit Industries Inc. turned to technology to help "slay the paper dragon," as one executive put it.
Today, through its use of advanced technology including image processing, it has done just that.
"When we first implemented image processing four years ago, we had great expectations about what the technology could do for us and the extent to which it could change the way we do business," said Jeffrey Butler, managing director and chief information officer at Countrywide.
"The imaging technology has exceeded our expectations. What we have gone through in the past four years gives us a huge advantage over our competitors."
Countrywide, based in Pasadena, Calif., is the nation's largest independent mortgage banker, collecting monthly payments for more than $25 billion in mortgages and servicing more than 370,000 accounts.
In a business that historically has involved a great deal of paper shuffling, as mortgages are issued, packaged, and sold to investors, Countrywide has become a low-cost operator able to handle rapid growth.
Using sophisticated optical scanning equipment from Management Information Systems, Countrywide employees can answer customer inquiries about their loans by calling up instantaneously on their computer screens an image of the homeowner's file.
In addition, Countrywide uses its computers to store and to speed up the processing of the more than 80 different documents a branch office might need per customer. Thus, image processing reaps big savings for Countrywide in inventory, storage space, and clerical time.
Because of its imaging system, Countrywide uses one employee to service each 840 loans. That compares to the industry average of 650 loans per employee. The technology also enables Countrywide to shave nearly half a point from loan fees and cut approval time to 30 days.
But in building one of the financial industry earliest and most elaborate imaging systems, Countrywide did encounter a few problems.
"Our major hurdle was the general acceptance," said Mr. Butler. "There is a definite fear that advanced technology displaces jobs. That's more perception than reality, however. You don't lose people because of technology; you simply shift personnel into other areas."
Countrywide also had to work with a handful of vendors and consultants before it could set up a complete system to handle its accounts.
"While external sources of expertise such as knowledgeable vendors, network integrators, and business consultants are becoming readily available, they were not when we began," Mr. …