Affinity Technology Group and Occidental Mortgage Co. of Irvine, Calif., are getting some unexpected results from a test of an automated loan machine dedicated to mortgages.
The terminal in the Laguna Hills Mall is attracting a far different demographic category of users than anticipated.
"Applicants range in age from 32 to 77, which really blew us away," said Lee Heidel, vice president of the mortgage division at Columbia, S.C.-based Affinity Technology. "We truly thought they would all be under 40."
In addition, applicants so far tend to be professionals with good to excellent credit records. Mr. Heidel said he expected the machines to attract mainly consumers with damaged credit.
Potential borrowers kick off the origination process at an ALM by filling out an application. The terminal processes the information, then pulls together credit reports, appraisals, and title applications. It also collects a signature electronically for Truth-in-Lending and other disclosure documents.
The application takes about 12 minutes to complete, Mr. Heidel said.
The package of information is then routed to a bank's systems. Once a decision is made, the bank contacts the applicant.
Affinity Technology makes a system that can automate the approval or denial of loans; it can deliver decisions through the terminals in minutes. Loan origination can be completed in 48 hours, Mr. Heidel said.
Affinity, which has sold ALMs and decision systems for other types of consumer loans to several large banking companies, plans to expand testing of its mortgage terminals by putting them in large corporate parks and in hospitals. It is seeking bank partners for the placement of mortgage terminals.
Dime Savings Bank, a unit of Dime Community Bancorp of Brooklyn, N.Y., is working with Affinity to develop an ALM that would make home equity loans. The thrift already uses ALMs to make unsecured personal loans. In addition, a Florida bank that Affinity executives declined to name has committed itself to installing ALMs for mortgages in its branches.
Mr. Heidel said that branch-based ALMs would free banks from having to staff all their offices with mortgage personnel.
By streamlining lending, the terminals also help banks project an efficient image.
Observers said ALMs and similar technologies are unlikely soon to replace traditional lending completely. But the terminals are good niche products that lenders may view as cheap tools for attracting business.
