Lending in the High Tech Age

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cover story By Sandra Lane I n the past few years, access through the Internet has proved to be the fastestgrowing mortgage application channel, and each year the number of online transactions increases. Consumer concerns about safety of their financial information are diminishing as they learn about the reliability of new and everimproving mortgage software platforms. Even older consumers are learning to use and accept the convenience of the Internet and high-tech communication systems. The effect of large numbers in younger generations who have already accepted and embraced high-tech communications will further increase the use of online mortgage transactions as they become older and want to buy homes. Predictions are that eventually almost all mortgage transactions will be conducted online. To examine the status of online lending across the country, we chose to look at three lending institutions. One is the largest online lender, another is a midsize online lender, and the third is a much smaller banking institution, gradually increasing its use of online lending technology. Regardless of the size of an organization, whether it offers full banking services or focuses exclusively on lending, demands for technology and programs to accommodate online lending are increasing. Quicken Loans Has Blazed the Trail A pioneer and frontrunner in online lending is Detroitbased Quicken Loans, presently the largest online lender in the nation. In 2012, Quicken Loans closed more than $70 billion in home loan volume, a 133 percent increase compared to the $30 billion previous record set in 2011. For the past three years, Quicken Loans has ranked highest in customer satisfaction, according to J.D. Power and Associates, which mirrors the company's ethos to excellent customer service. Established in 1985 as a regional mortgage lender, the company did not begin marketing via the Internet until the late 1990s. Today, Quicken Loans has approximately 10,000 employees based in Internet lending centers located in Detroit, Michigan; Cleveland, Ohio; and Scottsdale, Arizona; with additional locations in San Diego, California, and Charlotte, North Carolina. "We have team members positioned in various areas of the country to help our clients," explained Regis Hadaris, director of Internet marketing. However, for people who are not completely comfortable in sending and receiving information over the Internet, Hadaris says the company's seasoned lending professionals can answer questions by phone, if that is preferred. "We have a technology platform that enables us to lend in all 50 states and more than 3,000 counties throughout the United States," he continued. Hadaris has been with Quicken Loans since 2004 and says he has seen a lot of changes since then. He feels that homebuyers are gradually adapting to online lending. "In the early days, there was some hesitancy," he said, "but once people understood this was a tool that could enable them to transact loans with ease and convenience, they became a lot more comfortable with the process and came to appreciate the level of speed and simplicity it offered. "Another thing we've learned is that people want to be able to access updates concerning the progress of their loans," he continued. "Clients can ask a question, and the team members working on the loan will reply. This enables us to have one-on-one communication with our clients." To accomplish this, Quicken Loans offers a mobile app that will not only give proactive loan status updates but will also take pictures of clients' documents that can be submitted through their iPhones. Hadaris feels that Quicken Loans is unique in online lending because of its technology and apps that other companies do not offer. The majority of the company's software is designed in-house. "Because of our technology, we close most loans in 30 days or less. It takes most other companies 45 to 60 days or more," he said. Other kinds of technology have also been developed. "We pioneered the e-sign technologies for mortgages and were the first to have mobile mortgage applications. That's where you can use iPhones and Android phones to take pictures of documents and transmit them. You can get realtime information including contact information and where to go for closing," he explained. "The technology also enables clients to make payments online." Quicken Loans is quite flexible regarding closing details. Hadaris says the company will send someone out to a person's home to sign the documents, or meet him or her in a coffee shop or anywhere else the client wants to close. "We will send people out, if that's what the client wants, no matter where they are," he added. In addition to primary loan origination, Quicken Loans services the majority of its loans. In the past two years, the company has increased its servicing from 7,000 clients to 700,000, with a total servicing portfolio of more than $130 billion. Not only is Quicken Loans the leading online lender in "As for the future of online lending, the momentum can't be stopped." —Jeff Miller, Rivermark Community Credit Union The M Report | 17

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