WASHINGTON – Consumers will soon be able to receive approval of mortgage loan applications within minutes, the head of a nationwide mortgage loan provider said Thursday.
Jack Rodgers, president of American Finance and Investment Inc., said the firm on March 31 will make its application process easier, faster and less expensive with the help of interactive Internet software.
AFI’s Cybersmart Instant Mortgage System will allow prospective home buyers who have access to a computer and the Internet to learn if they’ll qualify for a loan within five minutes, Rodgers said.
The actual closing on the loan would take place after the information in the application is verified, which could be as fast as three or four days, Rodgers said.
Automating the process could bring AFI’s $355 application fee down to $100, he said.
To begin the process, a customer would log on to AFI’s World Wide Web site, at www.loanshop.com, and type responses to questions about his or her finances and employment history, among others.
The application would be evaluated by the Cybersmart software. The program runs a credit check on the applicant and notes salary and assets.
If the program approves the application, the customer then would submit documentation to verify the information. This would include: paycheck stubs, bank statements and income tax forms.
The customer could follow the status of the application by going to AFI’s Web site and entering a personal file name and password, Rodgers said.
He said customers should not be concerned about sending personal data over the computer. Typing the information into the program is safer than giving it out over a cellular phone, Rodgers said.
But Ben Delaney, president of First Citizens Mortgage Corp., a subsidiary of Citizens Savings Bank, said the automated process raises another concern. He said consumers aren’t given enough information over the Internet to decide if the lender is the best firm to borrow money from.
AFI has been offering loans over the Internet for three years and processes about 250 applications a month. Under its current process, an application is sent electronically through the computer, as e-mail, to an AFI underwriter. That underwriter runs the credit check and analyzes an applicant’s financial situation to determine whether or not to approve the loan.
AFI now responds with a pre-approval decision within a day or two, but the whole process usually takes about four to six weeks, Rodgers said.
Delaney said the fastest his bank has processed an application has been five days.
Rodgers said he hopes under the automated system, the number of applications will grow to 1,000 within a year.
The Cybersmart System to be used by AFI integrates software developed by Brightware Inc., which automates direct selling on the Internet, with Fannie Mae’s Desktop Underwriter software, used by many home mortgage lending institutions to evaluate a person’s credit history. -30-