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VOL. 111 | NO. 172 | Tuesday, September 16, 1997

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By LAURIE JOHNSON Out with the old, in with the new The USDAs new computerized loan-servicing system will improve services for 22,500 home-loan borrowers in Tennessee By LAURIE JOHNSON The Daily News The U.S. Department of Agricultures new computerized loan servicing system is now online in Tennessee, and it is expected to make home-loan tracking easier for both borrowers and government workers. The new system will modernize the USDA/Rural Development application process and give Tennessees 22,500 USDA home-loan borrowers improved access to information about their accounts, government officials said. "Tennessee families will have better service and easier access to mortgage information, and employees will be able to provide better follow-up and tracking of payment progress," said agriculture secretary Dan Glickman. With the new system, USDA home loans in Tennessee, as well as throughout the rest of the United States, now are being serviced through one central processing center in St. Louis. Previously, USDA/Rural Development used a network of 1,200 field offices to service home loans for 550,000 low-income rural borrowers nationwide, a labor-intensive system described by USDA/Rural Development state director David Seivers as "an antiquated process where employees filled out forms on electric typewriters and made notes on index cards." "Hopefully, this will help bring us into the 21st century," said Margie Rollins, spokesperson for the USDA/Rural Development state office. "This will bring us up-to-date technologically with other agencies and lending institutions." The new computerized loan servicing system allows the USDA to provide some new services to its Tennessee borrowers. They are similar to those offered by traditional banks and mortgage companies, Rollins said. New services include seven-day-a-week, 24-hour-day access to account information through a toll-free number; customer service representatives on-call 10 hours a day; escrow for real estate taxes and property insurance; and an automatic payment service. Computerized loan servicing became available in Tennessee on Sept. 1. Tennessee was among the last group of states in the country to go online with the new system. Nationwide implementation of the system came about as a result of realignment of the entire USDA system, which was reorganized in response to Vice President Gores National Performance Review initiative to improve the efficiency of the federal government. Rural Development, formerly the Farmers Home Administration, provides direct home loans for rural, low-income borrowers, as well as loans to assist with development of rural utilities, business and industry. The new computerized loan servicing system is expected to help the USDA offset the effects of this downsizing. Since 1995, when reorganization efforts officially began, the agencys presence in the state has shrunk from 32 county offices to nine area offices. At one time, there were 80 county offices. "When you have to reorganize because you are being downsized, you have to utilize all the modern tools that are available," Rollins said. "By centralizing the servicing in this manner, we will be able to do more with less." "This is taking a lot off of our office," said Mary Ann Fleming, community development technician for of the USDA/Rural Development area office in Covington. "It gives us more time for actual loan making, rather than loan servicing." The Covington office, which serves Tipton, Lauderdale and Shelby counties, has about 1,700 loans on the books. When fully implemented, the new system is expected to save the USDA $250 million over five years. Employee positions will be eliminated through natural attrition, such as retirement, Rollins said. The new loan system is cutting red tape for borrowers, as well, reducing the number of regulations from 16 (covering 290 pages) to one (covering 30 pages). Rollins said borrowers wishing to meet with a representative in person regarding their loans still will be able to, even though there are fewer offices. Representatives will visit each county at least once a month. Dates, locations and office hours of these visits will be announced in local newspapers, she said. Although Rural Development/USDA makes home loans, water and waste system loans, community facility loans, multi-family development loans, and business and industry loans, the only loans that will be serviced through the new system will be agencys direct home loans. "We had to start somewhere, and our single-family, direct home loan program is our largest, yet least complicated, program," Rollins said. "Later on, these other types of loans may be serviced by computer. For now, we just want to see how well this works. "We think it will be a very good thing in the long run. We have been in the dark ages for a very long time."
PROPERTY SALES 92 242 2,507
MORTGAGES 108 336 2,943
BUILDING PERMITS 202 643 6,711
BANKRUPTCIES 43 176 1,963