29 May 2004

Staff Train for Success



A new information technology system developed by non-bank lender, Mortgage House, can achieve a mortgage approval in one hour and significantly reduce possible fraud in mortgage applications.

The system has been developed internally by Mortgage House and is based on the idea of capturing complete and accurate information in an initial interview, enabling instant matching of this data with lending and insurance guidelines to achieve approval.

A one hour loan approval system is a considerable advance on current industry practice where 10 days is considered a fast industry standard, with slower approvals taking 30 days.

Questions asked in an interview are sequenced and follow patterns dependant on answers given, following an idealised format of questions that should be asked to establish credit rating and loan eligibility.

According to Mortgage House, managing director, Mr Ken Sayer, Mortgage House developed its own software since there was no industry equivalent which captured an ideal borrower/lender interview. The development of this software, further demonstrates the continual investment Mr Sayer places on the Mortgage House franchise brand.

“What we feel we have achieved with our technology is an all round quality experience for all participants in a mortgage transaction,” Mr Sayer said.

“For borrowers, they get an immediate response to their loan application during an interview with a Mortgage House lending manager. There is a uniform format at any Mortgage House branch or with any accredited broker.

“From our perspective as a lender, we are improving the quality of our loan book and significantly reducing the likelihood of fraudulent information influencing a loan decision.

“Our technology enables us to replicate the old fashioned interview with the local bank manager some years ago, where there is trust and service, although with a far quicker response time,” Mr Sayer said.

Elements contained within Mortgage House’s electronic mortgage management system, known as EMMS, are:

  • questions to be asked in any borrower/lender interview
  • directional sequencing of questions, which is at the heart of verification of information gained in the interview process
  • collection of property data in sufficiently accurate detail to enable legal processes to commence
  • matching of lending policies and criteria
  • continually updated interest rate information and deal criteria
  • alignment of information and credit assessment with mortgage insurance eligibility
  • tracking of application trends among brokers to detect possible fraudulent activity
  • Completion of a loan application within this system automatically equates with approval of a mortgage insured loan from Mortgage House.

Among operational outcomes for Mortgage House from EMMS are:

  • an enhanced competitive advantage from providing better service and faster approvals, likely to produce higher loan volumes
  • improved loan book quality since all loans are guaranteed to meet mortgage insurer requirements
  • reduced professional indemnity premiums resulting from uniformity of data gathering and compliance with all mortgage insurance provisions
  • increased job satisfaction for loan officers who can be focused on customer relations and relieved of administration
  • a reorientation of credit officer functions to focus on exceptions rather than the routine

Since EMMS has been developed specifically for Australian lending conditions and is a new rather than cloned system, Mortgage House considers it may become an industry standard and a possible component in future mortgage broker accreditation.

With the Australian Securities and Investment Commission seeking to impose some regulation around the mortgage industry, Mortgage House sees EMMS as having the potential to establish industry standards of uniformity.

Later in 2004 Mortgage House proposes to develop a separate revenue stream from licencing of EMMS to other lenders in the mortgage industry.

EMMS has been developed by Forevision, a Sydney-based technology company that was established in November 1999 to cater to the IT needs of Mortgage House. It is an independent company that is owned by Global Mortgage Equity Corporation, Mortgage House’s Holding Company.

Mortgage House is one of Australia’s larger non-bank lenders, with $2.5 billion in funds under management, and is 10 per cent owned by Macquarie Bank group.

Issued for Mortgage House by Westbrook Communications, 9231 0922

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