Large Banks in the U.S. to Push Mortgage Apps

U.S. banks are now competing to launch their own websites and mobile apps to make obtaining a mortgage much faster and easier, investments that may have modest near-term payoffs as the activity for home lending slows down.

Lenders have been focusing in spending on digital tools to cut costs, eliminate error-prone paperwork, and appeal to younger homebuyers. However, they are chasing down a decreasing pool of refinancing business and new home loan volumes are still under pre-crisis level.

Meanwhile, Bank of America Corp. has spent $1 billion on its digital banking services in the past six years. In addition, last week it launched its lineup of techy mortgage products.

During the first quarter, Wells Fargo & Co. had rolled out its website and app service. However, JPMorgan Chase & Co., which is investing $1.4 billion in technology this year, is planning to launch its offering later this year.

The app of Bank of America can automatically fill in the address of the client, its employment history, and other information that the bank already has, cutting out hundreds of boxes clients would otherwise have to fill. While JPMorgan’s app lets its clients to e-sign important documents.

Quicken Loans was the first one to gain grip with the digital home loans after its Rocket Mortgage launch last 2016. According to a data from Inside Mortgage Finance Publications, Quicken is the second-biggest U.S. mortgage lender.

Brianna Blust, a spokesperson of Quicken, stated that the app is now a key to its mortgage sales with more than 98 percent of the $20 billion in loans, which Quicken sold in the first quarter coming from Rocket Mortgage.

“Buying a house is supposed to be a joyful thing,” a head of consumer lending of Bank of America, Steve Boland, said. “Filling out 330 fields is not, I think, something that brings you joy.”

Wells Fargo, Bank of America, and JPMorgan, which are on the top 4 largest U.S. retail mortgage lenders according to Inside Mortgage Finance, have reported declines of $700 million to $5 billion in mortgage originations for the first quarter compared to the previous year. While the business mix is shifting, the average of U.S. homebuyers is also changing.

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