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Slashing time, costs from real estate loans

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SAN FRANCISCO–Of every dollar spent on labor costs to originate a mortgage, 85 cents goes toward activities that don't add value to the process. Many of those – such as creating and following checklists – could be automated, saving money for a company, said Neal Siegel, senior consultant with IBM. Siegel's comments were part of a session this week on "Lowering cost through automated underwriting, decisions and scheduling" at the Mortgage Bankers Association's 2004 convention. In addition to cost, the other reason mortgage companies should consider automated systems is speed, he said. "A mortgage is a perishable product," Siegel said. "Rate locks expire, commitments expire. Appraisals become stale as do credit reports." With an automated system, a loan "is not going to sit on a processor's desk a moment longer than it necessarily has to," he said. Allan Redstone, CEO of GHR Systems pointed out that automation is not the same as technology because automation reduces o...