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PA Community Bank Saves Time With Automated Mortgages

Although customers aren't flooding rural Community Bank's website with online mortgage applications, loan officers' time and trees are being saved with mortgage software.

As we predicted at the beginning of this year, 2011 does seem to be a year of mortgage technology adoption. Alongside back-office overhauls to cope with the foreclosure crisis, banks are pushing front-office technology to loan officers and mortgage borrowers. In a survey of 330 U.S. banks conducted last year by Lieberman Research Group, 18% of lenders said they currently provide borrowers with an online mortgage application, while 71% will offer the technology in the near future.

One bank that recently jumped into online mortgage applications is Community Bank in Carmichaels, Pa., a small community bank ($463 million in assets) with eleven offices in southwestern Pennsylvania. Using Mortgagebot PowerSite, the bank offers online mortgage applications that walk the customer through the mortgage application process in plain English, like an online tax application.

Customers are not flooding the bank's site with online mortgage applications yet. "We're in a rural area and you still see most people wanting to come into the office," observes Christine Turcheck, mortgage supervisor.

And about 90% of the online applications don't qualify for a mortgage due to poor credit or some other reason. However, Turcheck has seen a recent increase in qualified applications.

In addition to the consumer mortgage site, Community Bank also uses Mortgagebot's PowerSite Advisor module for home equity loans and PowerSite Pro module for loan officers that allows them the flexibility to change terms. "If you don't want the rate we have out there, the loan officer can get them an 1/8th percent of a discount," using PowerSite Pro, Turcheck says (the Advisor module does not let the user make changes).

One benefit of automating the loan officers' work is that they receive an instant credit report, so they can address any credit issues with the customer right then and there. Credit bureau data is also imported automatically into the application.

Before Community Bank began automating mortgages, every application was paper-based. (One previous system offered an online application, but it was so slow that the loan officers still had to take a paper application and input the data into this other system, so they were doing double work.) Now mortgage information is entered directly into Mortgagebot and customers get their disclosures immediately, either printed out or viewed electronically, rather than mailed to the customer. Customers sign all the documents in the branch.

This automated process saves the bank time. "We figure it's 33% faster to take an application online," Turcheck says. Fees are calculated automatically and certain lending regulatory rules are built into the software, automating compliance. In addition, the bank reaps postage savings due to not having to mail out disclosures.

Will banks like Community Bank ever get to all-online mortgages, through to the closing? "I'd never say never, but that would make me nervous," Turcheck laughs.

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