LA CU On Fire When It Comes To Online Mortgage Apps

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With more than 70% of its mortgage loan applications completed online, it's apparent that Los Angeles Firemen's Credit Union (LAFCU) knows something about online lending.

This month, the $534-million CU rides the online lending wave even further by introducing instant decisioning, according to Jackie Benoun, vice president of mortgage lending.

"The goal of offering automated approvals is to improve efficiency," Benoun said.

The 19,000-member CU now returns conditional approvals within minutes on qualified applications submitted via its website-a process that previously took about 45 days, she said.

LAFCU's online applications are a major contributor to the overall success of the mortgage program. Last year, the CU saw a 511% increase in first mortgage volume-more than any other CU in the nation, according to a report by Callahan & Associates. In the first six months of 2002, LAFCU processed about $67 million in first mortgage loans, compared to $11 million for the same period in 2001, said the report.

Instant decisioning is only the icing. Members are attracted to the three-year old online mortgage program because it is an extension of LAFCU's already-popular electronic branch, Benoun explained.

Approximately 30% of LAFCU's members use Fire Online, the CU's homebanking service, according to Dixie Abramian, vice president of marketing. Usage is more impressive amongst checking account holders-49% of members with checking accounts use the service.

And nearly half of LAFCU's homebanking members use bill pay.

"Our website and homebanking service are very successful," Benoun said.

LAFCU's online culture has developed from bill pay that is free to members, frequent online member surveys with promotional gifts, and "great marketing"-such as a "411 Alert Brochure" for e-statements, said Benoun.

Even though targeted marketing hasn't been necessary to promote loans online, LAFCU keeps its online mortgage program fresh by "continually improving the loan application," Benoun said.

Members can choose from two applications online. A short form is available to members who have borrowed from LAFCU within the past two years.

"It's important to recognize these members" with an easy-to-complete application, she added.

Other members complete a standard 1003 application. In addition, the CU personalizes the process by immediately emailing acknowledgments to applicants, many of whom apply after hours. Loan staff begins work 45 minutes before the CU opens to respond to the previous night's applications.

"We type the members' names into the e-mail, tell them 'good morning,' and let them know we've received their applications," Benoun said. "We confirm the loan amount and program. We let them know the name, extension, and e- mail address of their processor, and also let them know that they will receive additional information both by e-mail and postal mail.

"Applying for a real estate loan can be intimidating," Benoun added. "Applying via the Internet could add to the apprehension. By confirming receipt of the application with a friendly, informative e-mail, we hope to make the real estate transaction via the Internet a little more user-friendly."

LAFCU is aiming to e-mail periodic updates of a member's loan status, a service provided through Pleasanton, Calif.-based Ellie Mae, Inc.'s Mortgage Banker Series software.

Online, LAFCU consistently updates all related information.

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