The Paperless Trail

The ABN AMRO Mortgage Group taps technology to better automate the loan process

Mortgage lending is getting simpler and faster, at least for one division of Netherlands-based banking giant ABN AMRO.

ABN AMRO Mortgage Group (AAMG) is using technology to shave time and effort off lending, and is seeking new ways to grant loans, according to William Newman, executive vice president of AAMG and president of InterFirst, its wholesale division. This emphasis on technology is evident in AAMG's retail business offerings, which include several brick-and-mortar companies plus mortgage.com, acquired last year to provide an online loan option for consumers.

Industry observers praise AAMG's product strategy, and consider the firm a technology leader. "They're going in many directions, not putting their money in one basket," noted Jim Horne, president and chief operating officer of Lender Technologies Corp., a subsidiary of Mortgage Bankers Association of America.

It's a distinction AAMG plans to maintain, in part through innovative product introductions. In September, AAMG launched a technology pilot with Vendor Management Services (VMS), a Minneapolis-based provider of vendor and workflow management for the mortgage loan origination industry. Under the pilot, VMS is providing AAMG's National Lending Center, based in Sunrise, Fla., with its proprietary technology solution,TheVendorManager.

Built on an open platform, TheVendorManager will enable AAMG to electronically order, track, receive and pay for real estate-related products and services through a single technology channel.

"We wanted more than the ability to order services and receive status," said Don M. "Dusty" Lashbrook, senior vice president at the National Lending Center. "It also was important that complex, multitask processes, such as the receipt of title commitments and the clearing of the title exceptions, could be handled dynamically through the VMS interface."

TheVendorManager allows for easy system-to-system integration from clients' core operating systems directly to national service providers. A seamless interface between the product and its clients' loan origination and servicing systems allows clients to submit orders electronically for such products and services as appraisals, credit reports, title insurance, flood determination, home inspection, document preparation and more.

Initially, the National Lending Center will use TheVendorManager for its title and escrow workflow by automating the exception handling process between its loan origination system and First American Title Insurance Company. The process is designed to assist national vendors like First American meet clients' needs.

The VMS pilot is just one of several moves AAMG has staged on the technology front.

In June, mortgage.com announced one-fee loan pricing, bundling many fees related to home closings into a single figure that varies between loans but won't change between application and closing. The single fee doesn't, however, include prepaid interest, taxes, homeowners insurance or private mortgage insurance premiums. Still, it helps reduce homebuyer confusion and stress.

AAMG snagged mortgage.com after last year's dot-com crash. The Internet "created tremendous efficiency for us," Newman said, adding that Internet lending will only increase. Mortgage.com provided $422 million in loans in July, more than a 1,200% jump over the previous July.

The Internet is shifting the mortgage business from paper-with the cumbersome filing and mailing it entails-to a revved-up, electronic world.. "There's a small but growing segment of the retail mortgage marketplace looking for a way to self-serve," Newman said.

AAMG as a whole reported 45,669 loans in July, totaling $6.8 billion, up 347% over the previous July. The year-to-date total was $34.2 billion. InterFirst accounts for the bulk of volume, with July production of $5.6 billion, a 349% increase over the previous July.

Still, do-it-yourself online mortgages will require a shift in banks' mindsets, Newman said. AAMG isn't counseling consumers what to do but providing information they need to act on their own. This works best, however, for seasoned borrowers familiar with mortgage lending who favor speed over step-by-step hand-holding.

High-tech initiatives have helped AAMG's rapid success in the wholesale market, too, observed Patrick Sheehy, senior vice president, marketing and sales at Freddie Mac.

InterFirst operates MOAI (Mortgages Online at InterFirst), a Web portal for brokers to find funding for their customers, request documents and lock in rates. Launched in 1998, MOAI made InterFirst a pioneer of Internet services for mortgage lenders, Newman said. More than 14,500 brokers, or 95% of InterFirst's customers, use it.

In June, InterFirst enhanced MOAI with RULES (Registration Underwriting Loan eCommerce System), which links brokers to Freddie Mac for automated underwriting. RULES is available to just 15% of InterFirst's customers, but 30% of InterFirst transactions use RULES, which Newman considers a big success.