LAS VEGAS-With so many others backing off of mortgages, credit unions are hoping to make serious inroads into marketshare, making the need for a more streamlined, technology-driven process all the more important.
That's why $8-billion BECU, Tukwila, Wash., has reduced paper from its mortgage process, saying it is "all about lending efficiency."
"Paper equals a paper chase," said Joe Brancucci, EVP and chief lending officer at BECU. "It is hard to manage the file. Everyone is always asking, 'Who has the file?' Then, one day before the close, there is a search for documents and faxes, which required multiple people to spend time on it."
BECU has tracked a cost savings of 2.18 hours per day per employee just by having 50% of its 35-member lending team go paperless. Brancucci said this adds up to $206,771 saved per year on refinance mortgages alone. "And, members enjoy the convenience," he said.
Brancucci noted two "differentiators" going paperless in the mortgage lending process could bring to credit unions. First, CUs would be able to deliver all documents seven days before closing. "Too many lenders ask for docs one day before closing," he said.
Second is efficiency. Brancucci urged CUs to challenge processes, get rid of some traditions and clean up the application process to eliminate unnecessary information from the application. "Our application had 82 sheets of paper, 24 signatures needed, and it took 1.15 hours for a normal settlement," he recalled. "Today, it has zero sheets of paper, requires one signature, and takes 4.58 minutes."
BECU's staff also benefits from electronic lending, Brancucci told ACUMA's 2008 Fall Leadership Conference here. Because the loan file can be worked on anytime/ anywhere, the process can be done by someone at home. "This allows us to extend maternity leave, or simply get work done on a snow day," he said. "Also, the docs are available online for members to review seven days before the close."
Thanks to the streamlined process, applications can come in via the Internet, in-branch or through the call center. Brancucci said: "There is no difference with a paperless file, as long as the credit union doesn't change its underwriting standards."
How a CU creates its electronic loan file is important, so communication with vendors and partners is important, he emphasized. "You don't want to end up receiving paper from your partner," he told the audience.
Brancucci said for now, it is the mortgage lending process that is paperless. In the end, documents must be printed out as only two county recorders in the country allow mortgages to be closed electronically.
