Lending is a paper-intensive process, all the more so for United Guaranty as it has no control over how its customers--banks and other financial institutions--handle their mortgage activities, be it on paper or electronically. Until last year, United Guaranty used overnight shipping to send paper loan records to 25 regional underwriting offices as well as contract underwriters around the country. After a five-month development effort completed last July, the company launched a paperless underwriting process built on imaging and BPM software from Global 360, the Dallas-based vendor formerly known as eiStream.
"Origination often starts out on paper, but with Global 360, we can convert from paper, e-mail or fax, and we can also upload files from lenders that have already imaged their documents," says George Baity, a vice president of business systems at United Guaranty.
The new system not only lets users share mortgage documents electronically, it also provides a consistent workflow with rigorous tracking as well as task lists, alerts, calendars and collaboration features that keep work moving. The system has compressed the company's turnaround by as much as 24 hours--a huge advantage for lenders pressed for quick loan approvals. The company is secure enough in the digital process that it's now eliminating regional offices as leases expire and letting those underwriters work from home.
"Eventually we'll wind up with just two main support offices for the Eastern and Western U.S., but the underwriters will be home-office workers," Baity says.
The number of telecommuters working at home with broadband service reached 8.1 million in the United States in 2004, up 84 percent from the 4.4 million in 2003, according to The Dieringer Research Group (www.thedrg.com). Perhaps that shouldn't be surprising given that businesses save as much as $5,000 per employee per year between savings on office space and improved productivity, according to a study by the International Telework Association & Council (www.telecommute.org).
Using this estimate, United Guaranty could save as much as $500,000 per year when the company realizes its plan to move as many as 100 underwriters to home-office status. Baity declined to share the company's own estimates (or its expenditures), but he said the project was motivated by the desire for productivity gains and management control rather than savings on real estate.
"Even though it's still early in the process, we've already picked up productivity, and in many cases our underwriters are handling more files per day," he says. In addition, "we won't need the same number of people managing underwriters that we had when we had brick-and-mortar locations. One manager might be able to oversee 10 underwriters instead of, say, four."
The next phase of United Guaranty's deployment will see increased use of business activity monitoring and performance management capabilities, Baity says. With better reporting and metrics, the company could better balance workloads between underwriters as well as plan system and human resources based on current metrics and past patterns tied to fluctuating interest rates and seasonal demands.