Beneficial of Offer Equity Loans by Phone
Beneficial Corp. said Monday it had set up a unit to offer second mortgages by telephone, an increasingly popular strategy.
The new unit, Personal Mortgage Corp., Brewster, N.Y., uses a special computer system to act on loan applications in a matter of hours, the company said.
Initially, the srvice will be offered only in upstate New York. Plans call for expansion "within months" to Boston, New York City, and Philadelphia, the company said.
The idea of originating home equity loans by telephone is not new, but some large lenders have given the technique increased visibility in recent years. Prudential Insurance Co. of America, for example, has made heavy use of phones in originating both first and second mortgages.
David Olson, a vice president at SMR Research, Budd Lake, N.J., said he has been recommending the technique to banks, thrifts and other lenders.
A phone originations system can be an economical way for lenders to reach new markets, Mr. Olson said. "Bricks and mortar are so expensive," he said of traditional lending offices.
And to barrowers, phone originations can be convenient. "It's similar to buying clothes from a catalog," Mr. Olson said.