Contact: Donya Fahmy | PMI Mortgage Insurance Co.


Lender Among First to Process Mortgage Insurance Transaction Electronically

San Francisco, CA. October 28, 1993 . . . PMI Mortgage Insurance Co., a subsidiary of Allstate Insurance Company, announced that it broke new ground in the technology arena by piloting one of the first EDI systems for electronically processing mortgage insurance transactions, with FBS Mortgage. The Minneapolis/St. Paul-based lender can now electronically submit private mortgage insurance applications to PMI and receive insurance approvals using the ASC X12 Transaction Sets # 872 (the Application for Mortgage Insurance) and #263 (the Mortgage Insurance Response), recently approved by the Mortgage Bankers Association of America.

"Building electronic data interchanges is a significant first step toward the goal of paperless transactions, which we anticipate will become the norm in loan origination and delivery processes," said Duane White, Chief Operating Officer for FBS Mortgage. "We're pleased to be part of this pioneering effort and to usher in the kinds of technology that will help all of us in the mortgage industry as we continue to find ways to improve customer service." White added that the two companies made the pilot possible by writing interfaces that allow FBS Mortgage to use its existing hardware to execute the transactions.

"Our relationship with FBS is the first in a planned series of pilots for electronic-based transactions designed to speed transaction time and increase ease of use without significant additional investment in hardware." said Harvey Syverson, PMI's Vice President of Management Information Systems.

Syverson also noted that PMI was able to make FBS Mortgage's move toward a paperless environment even more efficient by making it possible for the lender to do direct PC-to-PC transmissions without the third party Value Added Networks (VANs) currently used to process many electronic transactions.

EDI (Electronic Data Interchange) is a form of electronic communication that allows two external organizations (or 'trading partners') to exchange business transaction information in predefined, structured formats, replacing paper-based exchanges.

EDI has been used successfully in many industries to increase efficiency and productivity, reduce costs, shorten critical service windows, and improve customer service. It uses nationally approved and maintained standards designed by the American National Standards Institute's EDI committee, known as Accredited Standards Committee X12.

The ASC X12 equivalent of a paper form is known as a transaction set . Transaction sets exist for invoices, financial information reporting, payments, tax information reporting and so on. The goal of standardized EDI is to identify common mortgage information and define standards for exchanging that information electronically so that it can move smoothly and efficiently between different service providers regardless of what computer platform, operating system, or program is being used at either end of the exchange.

Just as letters are used to form words and words are used to structure sentences, data elements are arranged into data segments, and data segments are arranged into electronic formats reflecting paper forms. The approval of the MI Application and Response transaction sets also brings with it the approval of data segments that can be easily used in other mortgage transactions, such as the credit report, the appraisal and the mortgage loan application itself.

FBS Mortgage is a Minneapolis/St.Paul-based residential mortgage lender offering a full range of products and services to customers in 46 states. A wholly-owned subsidiary of First Bank National Association, lead bank of First Bank System, Inc., FBS Mortgage maintains a $12.1 billion servicing portfolio and has originated more than $5 billion in residential mortgage loans to-date in 1993.

PMI Mortgage Insurance Co. is a San Francisco-based, triple-A rated private insurer of residential mortgages. Established in 1972, PMI is a subsidiary of Allstate Insurance Company, licensed to do business in all 50 states and the District of Columbia. It is the third largest private mortgage insurer in the United States with 53.9 billion dollars of mortgage insurance in-force as of year-end 1992.

Copyright 1993 PMI Mortgage Insurance Co.