A Decade Makes The Difference For UBOC Mortgage

It's not easy being a visionary. Back in 1994, when Ken Palla was responsible for the loan origination department at North American Mortgage Co., several envisioned business process improvements remained tantalizingly out of reach.

"There were a lot of things that we identified in our business reengineering effort that, at that time, we really couldn't implement because the technology wasn't there," he said.

But at Union Bank of California, where he's a vice president, Palla has found the opportunity to pursue ideas for the mortgage lending business that have been percolating for a long time.

Now, with better technology options everywhere, business-process reengineering has become a necessity rather than an intellectual exercise.

"The major lenders are going through a lot of technology innovation right now," said Palla. "You need to do it to stay apace."

Union Bank of California's relatively small presence in mortgage lending (it originated $4.3 billion in mortgage loans last year) hasn't deterred it from seeking technology solutions.

"There are a lot of solutions out there that are reasonable," said Palla. "I should be as efficient as any other major player out there, if I'm smart about it."

Union Bank of California' s computer mainframe runs hundreds of Unix applications, including a 10-year-old legacy loan origination system.

So when it came time to incorporate new systems within the existing architecture, Palla turned to a familiar face: Jerry Nelson, president of Decade Systems, Jacksonville, Fla.

"In 1980 he came out with one of the first mainframe loan origination systems, and subsequently sold that off," said Palla. "So it's not just some guys coming out of a garage saying, 'I have this new idea.'"

With its Total Enterprise Data Integration (TEDI) solution, Decade Systems worked behind the scenes to connect Union Bank of California's Internet mortgage origination system (from Mortgagebot, Cedarburg, Wis.) and sales automation system (from LoanSoft, Berkeley, Calif.) to its mainframe. Total Enterprise Data Integration provides connectivity and transfer of information between incongruent applications and databases and among trading partners.

With the use of Total Enterprise Data Integration, mortgage application data collected on Union Bank of California's Web site can be immediately and seamlessly downloaded into the bank's loan processing system.

Total Enterprise Data Integration also removes the need to manually manipulate information to and from databases and applications and completely automates errors and exceptions processing.

The Union Bank of California installation is the first time that Total Enterprise Data Integration has been used in a mainframe computer environment.

"Decade Systems was able to take the information from these two different systems and easily feed them into our legacy loan origination system," said Palla. "They gave us a file format we were familiar with, so the rest was kind of easy for us."

Indeed, efforts to develop standards in the mortgage industry are finally beginning to bear fruit.

"You actually have more standardization today than you've ever had before," said Palla.

With loan applications overflowing with information, the mortgage industry needs to figure out how to cram all that data into a relational format.

"I could have four borrowers applying on the same loan. I've got to have their names, their addresses, their Social Security numbers, their income, and their credit," said Palla. "That's the stuff that makes for massive amounts of fields, and that stuff's staying pretty constant."

Having delegating mainframe application interface development to an outside party, Palla is free to focus on other areas. "As the project manager, I just didn't have to worry about the problems of interface development," said Palla. "Typically, it's a real pain-it can be the critical path of your project."

Palla is working to create an online document repository for use by escrow officers and consumers alike, using a system from eLynx, Cincinnati.

"There are efficiencies across any of the loans I originate," he said. "They're not just for the loans that come off mortgage lending on the Internet."

Another efficiency-related initiative in the pipeline is automating the ordering of appraisals, using software from FNC, based in Oxford, Miss.

"The appraisal is the longest lead time in getting any type of loan," said Palla. "We're trying to squeeze down all of the different times."

Fast Facts

INSTITUTION: Union Bank of California

ASSETS: $37.6 billion

BUSINESS CHALLENGE: Integrating mortgage lending applications.

SOLUTION: TEDI from Decade Systems

KEY QUOTE: "There are a lot of solutions out there that are reasonable. I should be as efficient as any other major player out there, if I'm smart about it."Ken Palla, Vice President