Taking advantage of technology and investor partnerships, FleetBoston Financial is promising a quick and painless mortgage process through its newest venture, Celeris Financial Services.
Celeris – derived from the Latin “fast” – was launched as a new e-commerce division within Fleet Mortgage late last month. The naming of the new division was no accident: Celeris can provide “spontaneous” mortgage approval, according to division executives, with much less paperwork, the company claims.
Their secret? A combination of product, process and technology, available not only at Fleet branches but also through mortgage lenders, other banks and non-traditional lenders such as trusted financial advisors who use the Internet tools licensed out to them by Celeris.
“We are a business-to-business player, a developer and aggregator and distributor of e-enabled products and services,” said Celeris Chief Executive Officer William B. Naryka. “We’re probably the only company out there today that has simultaneously looked at products, the process, and the use of technology to deliver a totally new customer experience.”
And having a “unique partnership” with investors such as Fannie Mae doesn’t hurt either, Naryka said. Using what Naryka calls “top-of-the-mind” information such as a customer’s name and social security number, those using Celeris Internet tools can tap into the credit and property information databases of Fannie Mae and standard credit bureaus to provide instant point-of-sale approval.
In a worst-case scenario for those seeking a mortgage, Fannie Mae’s database would indicate that a traditional property appraisal was necessary for approval, said Celeris President Joseph T. McCartin. But he estimated that about 40 percent of those applying wouldn’t need such an appraisal and could be approved based solely on information already held by Fannie Mae.
Initially, the division will sell all qualifying mortgages originated through them to Fannie Mae and two other large investors that executives would not name.
“Our business proposition is pretty sound, and we have legitimate partners, which is how we’re able to make instantaneous point-of-sale approval,” Naryka said.
Naryka and McCartin are co-founders of the Columbia, S. C.-based Celeris, both having been executives at Fleet Mortgage for the past few years. Naryka will continue serving as chief financial officer at Fleet Mortgage through a transitioning period to Celeris, while McCartin, formerly chief information officer of Fleet Mortgage, will retain a consulting role there.
“The mortgage process is very cumbersome; it’s not very state-of-the-art,” said Naryka. “There’s the anxiety, the unpredictability, the time it takes … We’ve worked to develop a product and process that turns a very dreadful experience into a very positive customer experience.”
The process can also be positive for those originating the mortgages. Less paperwork for consumers means less documentation for originators to work through, making the process less time-consuming and more lucrative for them as well as their clients. And the mortgage closing time can be reduced to as little as three days.
“The consumer gets a hassle-free mortgage, and we hope at a price better than they’re getting today. And the lender or broker who provides the mortgage, because there’s much less documentation, can do so much cheaper at a higher margin,” Naryka said.
Both Naryka and McCartin said they were “amazed” at the positive response to this new venture as they pitched the idea in various places. Quicken Loans, a unit of Intuit, and Ellie Mae, a California technology company, have already signed on.
“Both were done easily. This has been very well embraced, very accepted. Both realized that what we’re offering is very unique to what other people have talked to them about,” said Naryka.
‘Seamless Experience’
Celeris will compete with other companies that have been cropping up, offering business-to-business mortgage products and services over the Internet. But what sets Celeris apart is what they aren’t trying to do, according to McCartin.
“We aren’t a Web site company. We’re a business-to-business enabler with expertise in integration of our system with that of trusted advisors for a seamless experience,” he said.
And licensing of non-traditional lenders is not likely to be an obstacle in Massachusetts or elsewhere, said McCartin.
“Banks are obviously a great outlet for our products. But we’ve also found that a tremendous number of independent financial planners are already licensed, and that a huge number of Realtors have taken it upon themselves to get licensed,” he said.
With that initial hurdle taken care of, the division’s products are simple enough to be used by any non-traditional lender, McCartin added. A Palm VII device built by Celeris and accessible on the Internet, as few as two pieces of paper documentation and some proof that clients have the money to pay (without specifying the source), and both traditional and non-traditional lenders have the ability to provide fast mortgage approval.
“That’s about as simple as you’re going to find anywhere,” McCartin said.
Once a borrower is approved by Celeris’ automated underwriting engine, they enter into a binding commitment, unlike other underwriting systems that first require verification of more in-depth information such as debt and income.
“The potential distribution for this is infinite. This is not what I would call a niche product,” Naryka said, estimating that 31 percent of all borrowers in the U.S. mortgage market could qualify for free “enabling” products such as the eXtremeline mortgage, the division’s core product.
Other products offered by Celeris include home equity lines of credit and credit card offerings. But this is just the beginning, according to McCartin.
“We’re very aggressively rolling into a multitude of channels,” he said, including the introduction of more diverse service products such as free quotes. Meanwhile, the company will be seeking a “massive replication” next year of the expected success and reach of the program this year.
Celeris has been in the works since the fourth quarter last year, Naryka said, culminating in the recent official launch.
The venture could also be a “very positive experience” for Fleet Mortgage, diversifying its earnings beyond usual mortgage banking activities and helping it gain mortgage origination market share. And the tools themselves can be diversified, with endless possibilities to offer new products, Naryka said.
“We’re looking to be a game-changer in the mortgage industry,” McCartin said.
