PERSONAL FINANCE
Despite advertising claims to the contrary, few mortgage lenders have successfully used the Web to take the pain out of securing a home loan. What they've done instead is put a Web interface on top of the existing process and call it revolutionary. Even sites such as E-Loan, which supplies advice, customized quotes, and loan recommendations, take a minimum of seven business days (and commonly up to four weeks) to close a loan and cut the check.
Sensing an opportunity, First Union Corp. decided to set the land-speed record for online loan processing. Since October, the mortgage lender has been able to close such loans through its site in just five days. Its application dispenses with all but the most essential questions, so, for example, you don't have to read through a list of inquiries about your previous properties if you've already stated that you're a first-time home buyer. More important, you don't have to submit forms and applications to all the players involved: First Union handles third-party documentation. Of course, you do have to pay a $99 fee, as well as charges for the work First Union coordinates.
First Union's secret weapon in the race against time is its new software, created and hosted by Xpede. "This is like the express," says Jaime Punishill, an analyst at Forrester Research. "You can have everybody working on the file at once. You don't have to go domino by domino by domino."
"With other mortgage Web sites, you submit an application and just basically get an acknowledgment that it has been received," says First Union senior VP Gary Suess. In contrast, within minutes, First Union sends the borrower a fully underwritten approval that includes a list of conditions. It simultaneously sends your information to appraisers and title agencies, which generally responds in four days. The fifth day is reserved for closing the loan, which still must be done in person.
"Technology is no longer a limiting factor," says Xpede VP of marketing Surinder Brar. "With the exception of certain conditions that may not meet a lender's credit policy, there's no reason mortgage fulfillment can't be instantaneous."
- Ben Schnayerson (schnay@hotmail.com)
First Union: mortgagedirect.firstunion.com.
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