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Community Lenders Seize Market Share From Big Banks by Using Advanced Online Lending Technology

Posted by OnCourse Staff June 28, 2012 12:06pm

Photo Credit: FreeDigitalPhotos.net

Point-of-Sale Technology Lets Community Banks and Credit Unions Compete With Large Lenders, as Online Loan-Application Capability Enhances Efficiency and Attracts New Business

MEQUON, WI--(Marketwire - Jun 20, 2012) - Mortgagebot® (www.mortgagebot.com) has tracked a growing trend by small mortgage lenders to adopt web-based, transactional online lending technology as a way to narrow big lenders' competitive advantages by creating greater visibility and accessibility in the online channel at affordable cost. Community lenders, limited by more modest resources, are countering big lenders' deep pockets and brand-name dominance with PowerSite®, Mortgagebot's point-of-sale origination platform that manages custom-branded loan application websites for more than 1,100 U.S. banks and credit unions. PowerSite's advanced capabilities have enabled community lenders to use it as a marketing tool to attract new customers and members to the online convenience and as an operational advantage to expedite the loan-approval process.

Matt Cotter, Mortgagebot's senior vice president of sales and marketing, says this technology is turning out to be the great equalizer in leveling the playing field against big lenders. With pay-as-you-go pricing, adopting PowerSite has become an increasingly easy strategic decision. "Community banks and credit unions are embracing it for competitive reasons -- increasing name recognition, widening the client and member base and creating more accessibility to their products," he says. "In growing online loan volume through a solution that offers affordable scalability, they capture an audience they otherwise would have difficulty marketing to."

Capitalizing on Market Opportunity

The switch to advanced online technology greatly expanded lending opportunities for community banks and credit unions -- including Bank of Galesville, of Galesville, Wis.; First National Bank of Catlin, of Catlin, Ill.; Paper City Savings Association, of Wisconsin Rapids, Wis.; and Community West Credit Union, based in Kentwood, Mich. -- all lenders with less than $165 million in assets. The lenders went from no online-application capability to full PowerSite deployment within the last year. They achieved:

  • Accessible online presence. A user-friendly website branded to the lender's corporate site features products for 24/7 accessibility by online borrowers. Steve Poss, senior vice president of $85 million-asset Bank of Galesville, confirms the bank has received many applications it may not have received without Mortgagebot, even though its products have always been as competitive as other lenders' products.
  • New Customers/Members. Lenders attract new borrowers, often from a younger demographic, who are largely comfortable with the online space. As much as 70 percent of Catlin Bank's online applications in the first quarter of 2012 were submitted by new customers, with many between 25 to 45 years old. In the first month of PowerSite use, the bank received an average of about one application per day.
  • Operational cost savings. Lenders gain virtual branches with no additional cost. Catlin Bank, which already commands the third largest market share in a one-county area, successfully expanded its market area. Bank President Jeff Fauver says, "The reason for our success derives from PowerSite, which enabled us to move into the adjacent county without the expense of establishing another physical branch."
  • Stable referral relationships. Realtors and referral partners appreciate the solution's convenience and ease-of-use. Paper City Savings, a $160 million-asset bank, uses PowerSite to solidify realtor relationships. Executive Vice President Debra Edwards says, "We've stepped up our competitive edge by showing realtor offices how easy it is to use the website. It places us at an even level with big lenders."

Loan-Processing Time Savings

PowerSite also enhances efficiency with streamlined processing, through such features as automated appraisal orders, credit report requests and delivery of compliance disclosures. Paper City Savings can collect the application fee, order an appraisal and obtain approval in ten days, the same period it once took staff to mail disclosures and collect the application fee.

Community West CU reaps similar benefits. PowerSite's automation immediately enters applicant data into the $114.2 million-asset credit union's systems, eliminating redundant data entry. For Catlin Bank, loan officers were devoting one to two hours for every submitted application before PowerSite. Fauver says, "PowerSite allows us to focus more of our energies to qualified applicants and quicken our processing time."

Convenience to Borrowers

Offering convenience to borrowers has also proved critical in attracting more business. PowerSite gives borrowers the easiest way to apply, says Edwards. "Paper City Savings has noticed a definite increase in borrowers coming to us to refinance loans from other lenders. Certainly, the added business comes from our accessible online presence and easy application process."

On-the-spot rates and multi-channel flexibility -- the ability to work on the same application online, over the telephone, or in-person at a branch -- further create a seamless experience. Applicants can begin an application online and later complete it in person. Heidi Hunt, mortgage specialist of Community West CU, directs members to their website. "I can view an application in progress and collaborate with borrowers. This flexibility provides a stress-free experience for members."

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