A review of more than 1,000 mortgage lending institutions using "smart" online lending technology has revealed that the online channel critically enhances banks' and credit unions' revenue growth, says Mortgagebot.

CapWest Mortgage, of Overland Park, Kans., for instance, underwent improvements in profitability, significantly expanding market share by growing loan volume from $1 billion to $1.4 billion between 2011 and 2012.

The bank, a division of Farmers Bank & Trust, N.A., aggressively used Mortgagebot's front-end point-of-sale automation, EnterprisePOS, to take in loan applications and engage customers throughout loan processing and underwriting. Collectively, users of the Mortgagebot Enterprise end-to-end lending platform took in more than 1 million applications in 2012, about a 50% increase over the 660,000 applications of 2011.

"We are finding that there is a solidified commitment to ‘smart' online technology deployment among lenders as they see a strong link between the online channel and their continued viability and profitability," says Matt Cotter, senior vice president of sales and marketing at Mortgagebot, a D+H company. "In fact, Mortgagebot's client numbers reached an all-time high in 2012 and our review also found that many lenders' online volumes far eclipsed their traditional avenues of application, such as in-branch or over-the phone intake."

Industry fluctuations make online-application capability a necessity for long-term lending success. Built-in optimization of online-application capability has changed the face of mortgage lending because of its success in adjusting to external factors-for example, threat of the fiscal cliff and fluctuating interest rates. The channel, by far the lowest cost channel for loan-volume growth, can give lenders cost-efficient scalability through the right platform.

CapWest Mortgage used Mortgagebot's per-loan pricing scheme to take in more than 14,000 online loan applications in 2012 and projects volume will jump to 18,000 in 2013, provided interest rates remain similar to 2012 levels. The bank's use of the platform's automation, which eliminates redundancy and helps it maintain full regulatory compliance, also enabled loan originators to more quickly render a loan decision, further reinforcing profitability. Its loan officers closed on average 24 loans per month, reaping time savings of nearly 5,000 hours.

With the exploding global mobile trend of smartphones and tablets, consumers are increasingly conducting business online, including shopping for mortgages. Smartphone subscriptions are projected to reach 3.3 billion worldwide by 2018, with 58% of current subscribers already using their personal subscriptions in their workplace, according to Ericsson Consumer Lab. Pervasive access to the online channel will only reinforce its significance to mortgage lending. Consumers' gravitation to the channel, combined with the user-friendly framework of "smart" online lending technology, sets up a self-feeding cycle, in which lenders can grow online loan volume while more and more consumers submit online applications for the technology's ease-of-use.

CapWest Mortgage found that in 2012 about 12% of its application leads came through on weekends. Online-application capability meets client preference because it sets up 24/7 visibility, allowing consumers to research mortgage rates and information or apply at any time or day.

The intuitive framework of "smart" technology also makes navigation of the application process a straightforward process and attracts quality borrowers. In fact, 89% of CapWest Mortgage clients who begin the application complete it the same day, with 98% submitting the application within seven days. Moreover, in 2012, the bank approved 38% of its online applications and, by early 2013, increased the approval rate to 45%, a result of Mortgagebot's identification and removal of outdated underwriting requirements from the bank's system. Additional applications are approved once loan officers review them for human errors, such as typographical mistakes on assets.

Consumers not only expect to be able to apply online, but they also demand ease-of-use to extend throughout all aspects of loan processing. For lenders to enhance their profitability, they must seek out superior quality and functionality of "smart" online technology, which ultimately determines the degree of customers' ease-of-use.

Monte Robbins, president and CEO of CapWest Mortgage, says the Mortgagebot platform provides on-demand answers, including real-time pricing, which is precisely the self-serve environment that clients want. "The return on our investment is great," he says. "We have experienced tremendous time savings to our employees and clients and we definitely see the platform as an affordable alternative to any other available system because it provides us with the precise leverage to increase our earnings."

[This article was posted on February 20, 2013, on the website of ABA Banking Journal, www.ababj.com.]

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