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OAKLAND, Calif. – ChevronTexaco Credit Union anticipates boosting mortgage servicing productivity to 1,000 loans per employee each month, up from 500 loans. At the same time, cost-per-loan is expected to drop to about $4, compared to the industry standard of up to $15 per loan. Duncan Gamlen, a real estate consultant for CTCU, says it may take six months or so to see those numbers. The new Internet loan servicing application PowerCore from Access Business Technologies was scheduled to go live by the start of 2003. “PowerCore is a proactive rather than a reactive system,” Gamlen says. “PowerCore places loans in queue based on predefined business rules that we control. Our efficiencies result from how we structure our statements, member service modules and collection features.” The credit union’s large loan volume will help, he notes, since “the larger the number of loans the more efficiencies you have.” CTCU is averaging $25 million a month in funded loans, and retains all servicing for a portfolio of $350 million. The current mortgage servicing staff includes an assistant vice president plus two staff handling more than 2,000 loans. Gamlen figures the new system should let them easily service up to 3,000 loans, allowing CTCU to keep staffing at current levels at least through 2003. He also expects future growth in mortgage servicing volume won’t be a problem. “It’s the most scalable technology I’m aware of,” he says. According to Gamlen, credit unions often don’t have the expertise to support the mortgage function. On the production side that’s not a big deal, but it’s critical for servicing. So he stresses training. “You can’t train your people too much. We want to drive this through incentives and training,” he notes. Gamlen advises credit unions to resist other popular systems that spit out impressive reports. “To the unknowing eye ChevronTexaco’s old software seemed to do all the things that were required for loan servicing. That is, until you know a lot about the business and how to bring down the cost,” he says. “We did an extensive amount of research to learn what was available that was PC-based. Much of what alternative systems do requires a lot of manual processing. We want to become automated.” While cautioning about being awed by mountains of reports, one feature that has Gamlen very intrigued is the ability to warehouse and image data. For example, he will be able to call up reports showing delinquency by state, by loan officer or by branch. The new system will be virtually transparent to members, Gamlen expects. The credit union will shift members who currently use coupons for their mortgage payments to monthly billing statements. Ultimately members will be able to access full information on their mortgage accounts through CTCU’s home banking system. Gamlen stresses a commitment to allowing members to use whatever approach they want to paying their mortgages. “If they want automatic deduction from their account, that’s fine. If they want to pay by check through the mail each month, that’s fine. If they want to come in and make their payment in person and see their favorite teller, that’s fine,” he says. PowerCore can be used for other loans except open-end ones. Will CTCU add auto loans and others to the system? “That’s under discussion. We’ll be evaluating that,” Gamlen explains. -

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