MBA 2004 technology study: Industry leaders committed to tech investmentMortgagePress.commortgage,industry technology According to the Mortgage Bankers Association 2004 Technology Study released in mid-March, technology operating budgets in 2003 increased by 24 percent over 2002 and expect to increase by an additional 12 percent in 2004. In addition, the MBA study shows the technology capital budgets increased by 153 percent in 2003 and expect to increase by an additional 47 percent in 2004. Doug Duncan, MBA's senior vice president and chief economist, cited five key factors for continued technology spending: industry consolidation for increased efficiency, the elimination of error-prone and costly manual processes, a continuous effort to integrate technology solutions from borrower to investor, new regulatory and compliance requirements with more detailed reporting, and, finally, an increased focus on retaining customers despite mounting competition. The MBA 2004 Technology Study was designed to benchmark information technology costs, related practices in mortgage lending and servicing among a focus group consisting of nine of the top 15 mortgage industry leaders. Other key highlights from the study included: †Total 2003 technology spending (operating expenses plus capital expenditures) averaged $140 million per firm, with 67 percent of technology spending dedicated to origination functions and 33 percent of technology spending to servicing functions. As mortgage volume eases, company technology budgets over the next few years are expected to focus on loan origination system conversions, consolidations and/or systems development. †Approximately 32 percent of technology operating expenses were related to outsourcing technology functions performed by business partners. †Attitudes towards technology spending and project implementation have changed in the past year due to the need for better alignment business strategies, faster paybacks and higher returns on technology investment. †Factors determining the value of technology investments are often difficult for companies to readily quantify. While many companies considered return-on-investment analysis to be a priority, the original value propositions used to justify initial investments were not always revisited, post-implementation. For more information, visit www.mbaa.org.