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Three companies, including mortgage giant Fannie Mae, partner to produce online mortgage software for community banks.

Taylor, Bean and Whitaker Mortgage Corp., a wholesale lender based in Ocala, Fla., recently launched Community Banks Online (CBO), a venture between TB&W, Fannie Mae and Dexma, an application software provider based in Minneapolis, to provide Web-based mortgage transaction capabilities to small financial institutions.

"It's part of TB&W's larger offering really designed to help banks respond to the rapid development of online banking," said Jason Moore, division president of CBO. "There's been a movement within the community banking market towards online transaction-based banking, and this is an attempt to help them make that transition."

The CBO offering, currently used by 33 bank customers, includes online "pre-approval applications" designed to entice consumers researching mortgages online to establish a relationship with their community bank.

"The pre-approval application as well as the online application runs a full credit and collateral check and downloads all of that information into the 1003 application," said Moore. "When a customer goes to a bank's co-branded CBO site and chooses to view the approved application, they actually download a letter on the spot saying, 'Congratulations, you've been pre-approved for a certain amount with your community bank,' and it gives all of the pertinent information."

Even though the concept of originating loans over the Internet has fallen out of favor, TB&W hopes to have found the right formula. "Products are being bought and sold on the Internet every day, and it's only a matter of time before this happens with the mortgage industry," said Moore.

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