Society Bank Using Laptops To Spur Mortgage Lending
Society Corp. is chasing new mortgages by equipping its lenders with laptop computers that provide quick loan approvals from a client's home or office.
The Cleveland-based parent of Society Bank plans to announce a mortgage loan system today that uses portable computers from International Business Machines Corp. It allows bank officers to give conditional mortgage approvals at a location and time of the customers' choice.
The system provides printouts of the loan application, interest rate, repayment terms, closing cost, and - if appropriate - the conditional approval letter, within an hour of receiving the information.
"One of the major concerns of a potential homebuyer is whether he or she qualifies for a loan," said Craig C. Brooks, president of the Society Mortgage Co. unit. "Laptops allow for those questions to be answered in a comfortable setting."
Following Nonbank Lead
With the announcement, the $15 billion-asset Society Bank joins a rising number of banks, including First National Bank of Boston, that are trying to catch up with the 150 or so nonbank mortgage players that already employ laptops to chase down customers.
"There were relatively few bank-owned [mortgage] companies using laptops a year or two ago, but I'd guess that 30%-50% of them are starting to use them now," said Thomas C. Palmer, senior vice president at Banc-Boston Mortgage Corp., which was one of the first bank-owned mortgage processing companies to equip its sales force with the microcomputers.
High cost is part of the reason banks have been slow to embrace laptop technology. An appropriately configured laptop computer with a printer costs $5,000 to $7,000. Buying a fleet of expensive machines is an unpleasant thought to banks trying to conserve capital in the short term.
Goal: Volume Up, Cost Down
By the end of this year, the bank estimates that it will increase mortgage loan volume by 25% to 30%, while reducing the cost of originating a mortgage by 10% to 15%, bank officials said.
Mr. Brooks said Society can now give the applicant a written confirmation of a loan's status within an hour.
In a typical "house call" with a laptop computer and printer, a bank's loan officer inputs the customer information into a computer that computes payment figures and qualifying status based on variables supplied by the bank officer.
When the sales call is completed, the customer is given a printout of the numbers making up the loan and the conditional letter of approval that becomes official once the numbers have been processed by the bank's main computer system. The information gathered on the visit is loaded into the bank's mainframe via modem.
The laptop service was developed jointly by Society's information technology group and Society Mortgage Co. Society licensed the software program, known as Uni-Form, from Associated Softare Consultants Inc., Middleburg Heights, Ohio.