Thanks to an interface called PowerSite from Mortgagebot, Bank of Colorado's mortgage borrowers are completing much of the initial work of applying for residential home loans themselves, tasks traditionally painstakingly done via manual entry by the bank's loan officers.

The gist of the system: Borrowers fill out applications, receive credit profiles, interest rates and pre-qualification approval letters they can use to make offers on houses, all via the Web, all potentially without the involvement of loan officers. PowerSite works in the background, behind the bank's mortgage site, or in back of the personalized Web pages of loan officers in the field. On the front-end, the system poses questions to self-directed borrowers and formulates new queries based on the applicant's answers. It's a Q&A format most familiar to those who have used similar DIY tools like Intuit's TurboTax. Based on the data the applicant has supplied, PowerSite will automatically compile a credit profile by pulling credit reports, which determine prospective interest rates. PowerSite runs the data through the automated underwriting engines Desktop Underwriter and Loan Prospector of Fannie Mae and Freddie Mac, respectively, which determine if the loan is eligible to be sold to those government-sponsored enterprises. If so, PowerSite provides required lending disclosures to approved borrowers regarding estimated closing fees and other costs.

The system has enabled Bank of Colorado to more easily take in new business in what's become a more favorable competitive environment. Since 2008, nine banks with total assets of nearly $8.1 billion failed in Colorado, non-bank lenders have exited the mortgage business, and giants like Bank of America have shut down their correspondent lending channels. Area survivors have been left to compete for larger shares of the home loan pie in the state, so long as they steer clear of what undid their former homegrown competitors: subpar performance in commercial mortgages, construction and development loans.

Bank of Colorado's total mortgage loan production has increased about 25 percent over the last two years, the bank says. Since yearend, per-month production rose by more than $4 million, with the Fort Collins, Colo.-based correspondent lender closing $20 million to $25 million per month. Since its deployment early in 2010, bank executives say PowerSite has saved time for loan officers processing that portion of new business represented by the percentage of mortgage applicants who completed the initial borrowing process on the system. Neither the bank nor Mortgagebot, owned by Davis Henderson, which last month acquired loan origination system provider Avista Solutions, broke out exact numbers that would represent self-directed customers who finished all those first steps using PowerSite. "It did allow us to take in the applications that we were getting that way, quicker," says Rodney Sanger, vice president in the mortgage division at Bank of Colorado. "Otherwise, using a Web site that wasn't intuitive and that just gathered information, a loan officer would have to take an application, pull a credit report, run findings, and print out and send the borrower all the disclosures. PowerSite does all that for them."

Loan officers are freed up to cross-sell, chase leads and generate new business, while interaction with third parties is sped for applicants. "We may have a borrower go into our Website on a Saturday and fill out the application, and it gives him or her a pre-qualification approval letter that they can print out and provide to a realtor," Sanger says. "So they can make an offer on a house over the weekend, and our loan officer was never even involved in that process."

Such experiences instilled enough confidence in Bank of Colorado's parent, Pinnacle Bancorp, to deploy PowerSite at Pinnacle subsidiaries in Nebraska and Wyoming about a year ago. The Bank of Colorado also took on the processing and underwriting of mortgages of another Pinnacle Bank in Texas in January 2011, which contributed $3 million per month to the aforementioned boost in Bank of Colorado's monthly loan production. The $2.1 billion-in-assets bank has about a 1.6-percent market share of deposits in Colorado, but it does, Sanger says, about 80 percent of the mortgage business in the farm towns of Brush, Fort Morgan and Sterling.

PowerSite will not process mortgages, but it works in conjunction with various loan origination systems that do. In Bank of Colorado's case that LOS is Calyx Software's Point. The bank uses CCMC-Bridgeware's WebBridge, which enables the mortgage application data to flow with a click, Sanger says, from PowerSite into Point for processing. CCMC's Web site says WebBridge works with other Web application solutions, including those from FIS, Insuritas and Intuit Financial Services.




BANK: Bank of Colorado

PROBLEM: How to free up mortgage loan officers to drum up new business?

SOLUTION: Unburden them from initial data entry, by giving customers the ability to fill out their own mortgage data.