Bank of America has launched a digital mortgage service that is being rolled out in stages across the country through Monday.
The Digital Mortgage Experience lets customers fill out a mortgage application through the bank’s mobile app or its online banking site, the bank announced Wednesday. Closings will still be done in person.
With this move, Bank of America joins Quicken Loans, Lenda, Social Finance and others offering a mostly digital mortgage. The trend is sure to continue.
“We’re seeing more digital mortgage discussion now" for various reasons, said Craig Focardi, senior analyst at Celent. They include Quicken's success with digital mortgages, record highs in manual loan processing costs per origination, and the increased adoption of standards set by the Mortgage Industry Standards Maintenance Organization, he said.
To create its digital mortgage, Bank of America reduced the number of fields customers have to enter into the mortgage application to less than half, according to Steve Boland, managing director of consumer lending.
“A standard mortgage application has well over 300 fields that have to be completed,” Boland said. “We prefill the vast majority of that information, and so it's made that experience seamless.”
Relevant data and documents are pulled automatically from the bank’s own systems, saving customers from having to type a lot of information into their phone and having to take photos of documents. For noncustomers, the bank works with a data aggregator to pull the needed information from other financial institutions.
The closing experience is traditional, but Boland said the time it takes clients to get to closing is almost cut in half.
Whereas normally it can take 30-45 days to close a loan, on average the digital mortgage takes around 20 days, he said, depending on the state — New York has longer closing times, while California has the fastest.
The bank’s existing Home Loan Navigator tool guides the customer through the process and provides status updates.
“That helps you the entire way," said Michelle Moore, head of digital. "So if there are documents we need from you, you can use the picture-taking capability to take a picture of the documents, you can e-sign documents, we have to-do lists for you, we have the connection to the home loan officers. It really is an end-to-end experience,”
The bank’s lending officers are available by phone and video chat to assist with anything that might trip the customer up in the mobile app.
“Digital doesn't replace the lending officer — it enhances the experience of the lending officer because we make the busy work easy and we still want to make sure that any time you want to connect with a real-life person with the expertise to help you with a mortgage, they're available to you,” Boland said. “I think that's a big deal because there are some people out there who would think it's either-or. Our clients tell us no, we want both.”
The bank also has more than 700 financial centers where consumers can meet with a lending officer through video conferencing.
Income and employment verification are handled electronically in the mobile mortgage. Appraisals are handled normally, and status updates are given through the app. The mortgage application can also be stopped and restarted at any time.
The technology project was a heavy lift, according to Moore.
“We had a lot of system integration to do, and a lot of learning to do about what consumers wanted and what they didn't,” she said. “It took some time.”
In a recent survey the bank sponsored, consumers said they were ready for digital mortgages.
“Consumers said they were more comfortable doing a digital mortgage than using an online dating app,” Boland said. The Bank of America Homebuyer Insights Report also found that 52% of respondents would apply or have already applied for a mortgage by mobile device or online.