Virginia First Savings Bank is asking the government for permission to offer and approve mortgages over the Internet.
If the Office of Thrift Supervision approves the request, the $800 million-asset Petersburg, Va., institution would become the first thrift to originate loans on-line.
"We're really hoping to streamline this process by providing a much easier method for customer fulfillment that doesn't cause as many headaches or take as much time," said Virginia First's president and chief executive Charles A. Patton.
Mr. Patton said his thrift would be able to cut mortgage loan processing time to as little as five days. Customers would know whether their home loan was going to be approved within an hour of applying electronically, he predicted.
Virginia First plans to offer the loans through American Financial and Investment Inc., a Fairfax, Va.-based discount residential mortgage broker that the thrift acquired in December.
While originating and approving loans electronically, Mr. Patton said customers would still be required to physically sign certain disclosures when the loan is closed.
American Financial, like several other mortgage brokers, has offered on- line loan origination services for several years, Mr. Patton said. However, when it became a subsidiary of the thrift, OTS required American Financial to halt most of its Internet services, according to the April 10 application.
Citing security concerns, the agency barred the brokerage unit from originating loans on-line; it only could offer basic mortgage information and answer customer questions over the Web.
"No information of a financial or confidential nature may be obtained through this means of telecommunications," John E. Ryan, director of the OTS' southeastern region, wrote in a Dec. 13 letter to Mr. Patton.
But Mr. Patton said he is confident the OTS will approve the request. "American Financial has never had any problems with hackers accessing data," he explained.
Other thrifts offer loans over the Internet, an OTS official said, but have not been permitted to approve the loans on-line.
For example, customers of First Security Network Bank of Atlanta, which became the first insured institution to operate exclusively on the Internet, can print out a loan application available from the thrift's Web site. The application can then be mailed back to the thrift for consideration, the agency official said.