Online Mortgage Application Triples Bank’s Volume

After Mesilla Valley Bank (MVB) opened in late 2000 in the fast-growing community of Las Cruces, N.M., bank officials determined that the mortgages would be a good line of business for the bank. So Michael Henderson, a director at MVB, started working on building the mortgage business in the summer of 2001.

But he soon found that the paper-based application system the bank was using meant that it took about three hours to process a mortgage application, and Henderson sometimes had to do the work himself. "I was getting up at 4:00 in the morning," he remembers. "Early on, I didn't know that I could do it faster. I was just out here in the dark."

That changed in December 2001, when Mesilla Valley Bank started using the CommunityBanksOnline (CBO) Web-based mortgage-origination service, provided by Taylor, Bean & Whitaker Mortgage Corp. (Ocala, Fla.). MVB-which currently has $25 million in assets and about 1,000 customers-serves as the mortgage broker, and Taylor, Bean & Whitaker is the mortgage banker.

In the past, prospective homebuyers who applied for a mortgage at Mesilla Valley Bank filled out a paper mortgage application, which then had to be entered into a computer. MVB also had to calculate additional, information such as debt ratios, manually. After compiling an application package, Henderson sent it by overnight mail to his mortgage banker and usually heard about approval in two or three days.

START TO FINISH IN 10 MINUTES

Then he got a postcard in fall 2001 telling him about CBO. The service has offerings geared for both a bankers' Web site and a consumers' site. Henderson took a tour of the sites that basically walked him through the automated application process, and then spoke with an account rep. "It blew my mind how easy it was," according to Henderson. "It did everything from start to finish in about 10 minutes."

Henderson did not consider alternate services, although he has subsequently monitored other providers' offerings. "It was so far better than what I had, why would I continue to search for more?" he says of his decision to go with CBO. "It was a no-brainer."

Yet a shift like this is not minor, Henderson says. "The biggest challenge is to get people to change. You are dealing with the mortgage business, with people who have been doing it forever," he says. "The trust to change systems is a real leap of faith."

Henderson had his own concerns going into the transition, especially because the CBO completely changed MVB's existing mortgage business process. "It was kind of intimidating to me, because it was all online." But it was no big deal, he adds. "I learned it in a half-a-day, and I have never looked back."

The implementation process proved simple, too. MVB needed no new hardware or software to start using the system, Henderson says, just a password to the CBO bankers' Web site. The cost: "Zero, zippo, nada."

These days, Henderson uses the bankers' Web site, and 30 to 40 percent of Mesilla Valley Bank's mortgage applicants go online and use the CBO consumer site. "They can do it in the comfort of their own home," Henderson says. "It is not so invasive."

After being notified by CBO to go to the bankers' site to review an application, Henderson spends a few minutes filling in information needed before submitting it. He usually hears about approval in one to three minutes.

Mortgage applicants are "amazed and dumbfounded" by the speed of the process, Henderson says. "It is so user friendly for both the bank and the customer." And the time Henderson saves can be used to cross-sell mortgage customers on some of the bank's other services.

CLEARING $3 MILLION A MONTH

Before the new system, Mesilla Valley Bank handled $500,000 to $1 million in mortgage originations monthly. Since then it sometimes clears more than $3 million monthly. Henderson believes "the correlation is one-to-one" between adopting CBO and seeing a big boost in the bank's mortgage business. Now, he says, "customers really appreciate what the bank can do for them through this process."

FAST FACTS

INSTITUTION: Mesilla Valley Bank (Las Cruces, N.M.)

ASSETS: $25 million

BUSINESS CHALLENGE: Increase efficiency in mortgage processing by implementing an Internet-based application for both internal use and for external customers.

SOLUTION: Taylor, Bean & Whitaker Mortgage Corp.'s (Ocala, Fla.) CommunityBanksOnline (CBO) mortgage-origination service.

KEY QUOTE: "The trust to change systems is a real leap of faith. It was kind of intimidating to me, because it was all online." But, "I learned it in a half-a-day, and I have never looked back."

-MICHAEL HENDERSON
DIRECTOR, MESILLA VALLEY BANK