Archived Columns

Internet Leaders Showcased at Conference

By Scott Kersnar, Editor, Mortgage Technology Magazine

Mortgage professionals attending SourceMedia's 10th Annual Mortgage Technology Conference got a review of state-of-the-art Internet-based lending, as keynoters Pete Bonnikson of E-Loan and Joe Dahleen of MILA followed LendingTree general manager Lori Collins to showcase high-tech direct and wholesale mortgage lending.

Mr. Bonnikson, an eight-year E-Loan veteran, came over from North American Mortgage in 1999 to help Pleasanton, Calif.-based E-Loan evolve from a multilender online broker to a consumer-direct mortgage banker. He outlined E-Loan's funnel strategy to bring Internet "transactors" to the site to receive a variety of financial services beyond mortgages, car loans and credit cards. The company leverages extensive testing to understand how consumers are drawn to its site and surrounds visitors with tools and information to hold them there.

Over the years, said Mr. Bonnikson, E-Loan has simplified its online application and deployed instant decisioning to identify qualified prospects in subsecond time and connect them with a loan consultant within two minutes of their hitting the "submit" button. Over 85% of E-Loan-approved -- and fraud-checked -- customers are contacted within five minutes. That loan consultant remains their single point of contact throughout the transaction. Twenty-five percent of all approved customers commit during the first call.

E-Loan's back office -- like MILA's -- is 98% paperless today, he said. Automated doc prep minimizes errors and shrinks turn times. By the end of first quarter 2007, E-Loan expects to launch e-signing of closing docs, using a power-of-attorney to enable e-signing of closing docs by multiple parties to a loan signing at separate locations.

Though long known as a refi specialist, today 60% of E-Loan's volume is in purchase loans, with over 90% of Realtors involved in those transactions giving E-Loan high marks. E-Loan is so proud of its efficient and scalable back-office processes that it is now opening some brick-and-mortgage branches to put those efficiencies to the service of borrowers who prefer to deal with a live loan officer.

E-Loan has built a solid reputation for consumer advocacy, particularly in the legislative battle to provide consumers access to their credit scores. Leveraging its bank-owned status, E-Loan said that in a five-week period following the launch of its no-fee, high-yield online savings and certificates of deposits offering, it has received more than $754 million in online deposits.

Speaking on "Examining Innovation Processes to Capture Future Trends Today," Mr. Dahleen, the director of sales production for Mountlake Terrace, Wash.-based wholesaler MILA Inc., used his keynote address to introduce Credex to give its approved brokers a no-cost, online credit and loan application for their borrowers, with the only tri-merged mortgage credit report available in both English and Spanish.

Credex includes an automated FACTA notice ensuring that brokers are compliant with legal requirements now mandated in all states. Credex was developed by MILA's wholly owned Next Online subsidiary that developed its AccessPoint automated decisioning and loan management tool. Credex enables brokers to send vital information via text message, e-mail or fax. Everything is displayed online to the broker and is fully integrated with DU and leading broker LOS systems.

Fraud detection is so important at MILA, he said, that fraud reporting is embedded in its LOS. He said that the fraud problem will never go away. "Combating fraud means combating human nature," stressing that the ease of use of today's technology perpetrates fraud and requires multiple prevention measures.

Like Mr. Bonnikson, Mr. Dahleen emphasized the key importance of streamlined fulfillment processes. "The best technology innovation eliminates rather than aggregates," he stressed. As an example, he said MILA's AccessPoint now returns a decision to the broker that only touches on the attributes that affect pricing, with displaying all products for which the borrower qualifies. He advised attendees to stay away from technology that adds steps to the process, seconding the statement of MILA founder and CEO Layne Sapp's prediction that the technology that will count most "will likely be less about any specific innovation and more about building a strong technological foundation with the innovative elements we already have."