To expand its market share and give customers more convenient service, Market Street Mortgage Corp. is using an automated telephone service for loan preapprovals.

Developed by Creative Solutions Group Inc., an Atlanta-based provider of loan-qualification and lead-generation systems, the service, called Purchase Power, can be reached 24 hours a day by phone or fax. It provides mortgage preapprovals in minutes, according to Market Street officials.

The Clearwater, Fla.-based mortgage company - a unit of Republic Bancorp, a $1.4 billion-asset bank holding company in Ann Arbor, Mich. - plans to use the service to capture new business.

"We can use the system as a tool to reach prospects through realtors and builders," said Barbara Van Antwerp, a senior vice president in Market Street's Phoenix office.

Purchase Power "increases our availability and ability to serve customers and generate leads," she said.

Like Market Street Mortgage, other financial institutions, such as banks, have taken a renewed interest in the ordinary telephone as a service tool, despite the proliferation of more high-tech devices.

While most banks have offered basic customer service via telephone for years, more recently they have been reorganizing telephone centers to sell specific bank products and to strengthen retail relationships.

Telephone agents now open accounts, take loan applications, sell investments, and offer financial planning assistance.

Retail bankers expect to invest more than $1 billion annually over the next three years on automated service channels, with $176 million a year going into improving telephone-based services, according to the 1994 American Banker/Tower Group/Andersen Consulting technology in banking survey.

"It's all about convenience," said Market Street's Ms. Van Antwerp. Offering 24-hour telephone service "fits into anyone's schedule," she said.

Purchase Power gives a consumer prequalification and likely mortgage loan limits.

To apply for a loan, a customer calls an 800 number and is prompted to enter, through touch tones, such personal information as current salary and available cash. Customers can also fill out Purchase Power questionnaires they get from local real estate agents and fax them into the system.

The information is analyzed by the system using parameters set by the lending institution and credit bureau scoring.

In about five minutes, the customer gets a range of affordable home prices. The system also estimates the down payment and closing costs and compares different loan programs.

The service is targeted at first-time homebuyers, many of whom do not know whether they qualify for a mortgage until after they have decided to buy a house, according to Ms. Van Antwerp.

In addition, the service is quicker and more convenient than making an appointment with a loan officer, and it affords a certain amount of anonymity to customers who fear discrimination or embarrassment over their financial status.

The system is also a powerful tool for loan officers, who can bring value to realty and builder relationships by sending preapproved clients to them, Ms. Van Antwerp said.

The mortgage company plans to market the system through direct mailings and home finder guides. It will also offer Purchase Power information to real estate and builder offices.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.