Marketing mortgages — without the loan officers

A startup mortgage lender is catering to tech-savvy, do-it-yourself borrowers by using online and mobile tools to replace the upfront sales and marketing work of loan officers.

Arrive Home Mortgage in Naperville, Ill., is only active in a couple states. Its soft-sell approach doesn't target high volume, but rather aims to make it a niche lender that uses technology to handle borrower engagement before an application is submitted to keep costs down.

"What loan officers get paid to do is find customers, counsel and educate those consumers as to what their best choices or opportunities are, pre-qualify them, and then get them to commit to making a loan application," said Dan Cutaia, industry veteran and president of Arrive. "That's why loan officers get paid so much, those three things, and we've automated all three."

Borrowers can interact with the company through mobile technology to learn about loan options without providing information that identifies them, so they won't supply enough information to trigger compulsory disclosures lenders have a deadline to deliver.

"I don't collect the six pieces of information [that trigger disclosures] until they opt-in at the end," Cutaia said. "Unless they opt-in to our come into Arrive's [loan application process], I don't even know they exist. They're out in the app world in encrypted data, with firewalls and all that."

While the consumer-direct channel continues to account for a larger share of both purchase and refi originations, Arrive's strategy draws some skepticism because the sales approach is not very aggressive and its system doesn't capture information from inquiries that could be valuable as sales leads.

But at a time when all mortgage companies must take a hard look at how they staff their operations, Cutaia is willing to see if it can gain traction.

"The big question is will consumers really like this? I can't tell you how many people tell me I'm foolish because it's too passive," he said.

The company hasn't completely done away with loan officers. Instead, they engage with borrowers after an application is submitted. The reduced workload helps keep headcounts down.

Certain borrowers who want mainstream mortgages, are willing and do business online for a discount, and are tired of being barraged by all spam and other marketing vying for their attention, will welcome Arrive's BeLoanReady app.

Its existence is a sign that while loan officers can't be completely replaced with technology, borrowers increased use of it is changing the ways lenders have to communicate with some consumers to reach them.

"We don't have vision of our technology replacing all the loan officers out there," he said. "We think there are consumers that want to pay for that service, but we also think there will be consumers that want a digital experience they can control."