Stephen Sessler, the director of mortgage banking at Camden National Bank in Maine, gave some advice Thursday to bankers who are fearful of taking the plunge into digital mortgages.

"Don't be afraid to jump," Sessler, a senior vice president at the bank, said at the Digital Mortgage conference sponsored by SourceMedia in San Francisco. "You think it's a bigger step than it really is."

The $4 billion-asset Camden is one of about 35 banks, including Wells Fargo and U.S. Bancorp, that have partnered with Blend, a San Francisco cloud-based software company, to originate digital mortgages.

In April, Camden launched its online mortgage portal, which it calls MortgageTouch, to automate the application and preapproval process. Camden closed its first loan through Blend in mid-May.

One of the advantages of digital banking is that applicants can fill out basic "forms" any time they want, and they end up having fewer mistakes, experts says.
Curtailing mistakes
Because consumers are inputting street address and other basic data themselves, the time spent on problem applications has dropped, and now most applications are ready 12 to 14 days before closing, Camden Bank's Stephen Sessler says.

Borrowers can access the portal through their cellphones and other devices to securely sync bank statements, tax returns, payroll information and other data needed to apply for a home loan.

After just six months, 48% of mortgage applications are coming through the portal, with 31% of them coming from mobile devices, Sessler said.

Camden rolled out the digital platform in stages because it wanted to prove to loan officers that the technology had many benefits, particularly in improving the integrity of borrower data.

"Anything that smacks of replacing [loan officers] with technology does not go over well," Sessler said, to some laughter from the audience.

Brian Kneafsey, head of client operations at Blend, said there is a view that banks moving into digital mortgages are trying to bypass loan officers.

"It's really supposed to be something that supports a bank's operations," Kneafsey said. "Sometimes there's a misnomer that this is consumer direct."

Camden also wanted to assure its customers the real humans (i.e., the bank's mortgage lending staff) still would be available to assist potential borrowers though the process, which is why it used the word "touch" in the title of its portal.

The foray into digital mortgages has had a big impact in reducing inaccuracies in mortgage applications, which can hold up the loan process, Sessler said.

Because consumers are inputting the data themselves, they are less likely to misspell their street address or get their Social Security number wrong. The time spent on problem applications has dropped, and now most applications are ready 12 to 14 days before closing.

"Our application accuracy has gone up, which has cleared up issues in the back office," Sessler said. "There are no missing pages of a bank statement, no wrong Social Security numbers, because the borrower is getting the information directly from a provider."

There are other benefits. Borrowers can work on their mortgage application at any time, often at night, so loan officers have more time for other tasks during work hours.

Sessler also sees the digital mortgage platform as a recruiting tool. Since many experts believe the $10 trillion mortgage market is moving to the cloud, the new technology gives potential employees the sense that the lender has some staying power.

Still, not everyone is ready for a major change. The bank got blowback from real estate agents and had to "re-manage" how they promoted the portal, he said.

"Initially there were some unnerving responses," Sessler said. "It was one thing we hadn't really thought through in the process of what the reaction might be from Realtors."

Going forward, the bank is looking to add home equity lines of credit and potentially auto loans and other consumer products. The bank, a unit of Camden National Corp., has a national mortgage license and envisions spending about $100 million to expand in the Northeast.

Sessler said the bank is "strongly considering" offering mortgages directly to consumers because the digital mortgage platform has freed up its strategy.

"Can we expand without the traditional hires?" he asked rhetorically.

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