The days when costly human resources and low margins forced community bankers to send customers to the competition for mortgages could be as distant a memory as eight-track tapes if Dyad Corp.'s alliance with New South Federal Savings Bank catches on.

Dyad is pitching its video mortgage kiosk, connected with a high- speed ISDN line to a mortgage underwriter in New South Federal's call center, as the best way for community banks and credit unions to get in on the mortgage action. "Most community banks can't afford mortgage people on their staff; they just don't have the volume,"says Dyad president and CEO C. Michael Bowers.

But why would a community bank allow the competition to sell its products right in the local bank's lobby? Bowers argues that while banks lose out on the mortgage business of their regular customers, the kiosk will prevent that customer's vital statistics-the prized marketing information that is collected on a mortgage application-from being handed over to other local banks. "This kiosk allows the community bank's customer to remain the community bank's customer and not give up any competitive information to the other local entities," Bowers says.

The kiosk is a conglomeration of technologies that combine to allow a would-be borrower to close a loan in three sittings. First, a touch screen walks the customer through a mortgage application. Next, a video link to a New South Federal underwriter is established. The underwriter explains the loan options, with the video display showing the financial breakdowns. The necessary financial and employment documentation is placed on a scanner in the kiosk so the underwriter can verify the application. A printer at the kiosk provides loan documents for the applicant. If everything is in order, and the customer selects a product, the kiosk can even accept credit card payments for appraisal fees, title insurance and other incidentals.

When everything is complete, the loan is closed by the community bank staff. "The borrower will know he is dealing with another entity to handle certain aspects of the process," says David Mewbourne, evp of Birmingham, AL-based New South Federal. "But the (mortgage) process is designed for the community bank to provide the funding so that its customer has been served by that community bank."

New South Federal will then buy back the loan and servicing, paying the community bank a percentage of loan as a commission. Mewbourne says New South Federal is giving careful thought to the underwriters who will handle the kiosk calls. "There needs to be a high level of customer service tied to this product channel," he says, "because if the community bank or financial institution is referring its customers to us, we've got to be an extension of the service they would provide themselves."

The video kiosks cost about $25,000. The first unit was due to go on-line at Forth Worth Educational Employees Credit Union in November.


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