A cause for celebration?

Author:Hewitt, Janet Reilley
Position:Mortgage banks' productivity - Editorial

A Cause for Celebration?

Automation is clearly a critical component of any mortgage operation. The benefits of automation are being felt on both the production and servicing fronts. Stark evidence that automation is paying its way on the servicing side emerges from the industry cost study just released by the Mortgage Bankers Association.

Two convincing signs of higher productivity during 1988 in the servicing operation will warm the heart of the industry's managers. The average number of loans serviced per servicing employee jumped by 46 loans in one year's time. In 1987, that average was only 570 loans. But in 1988, the average per servicing employee rose to 616 loans. This is the highest level of productivity since 1981, notes MBA's economics department - the authors of the study. The study profiled the top 10 most profitable firms amongst the respondents. This group posted on average 703 loans per servicing employee and boasted total direct costs that averaged 26 percent less than the other firms responding.

The other notable trend on the cost side was the finding that servicing personnel expenses dropped for the first time since 1984 on a per loan basis. Personnel expenses represent about 40 percent of the direct expenses tied to servicing. As one of the...

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