Magazine article American Banker

Wanna Make a Mortgage Payment? Write, Don't Visit, Says N.Y. Thrift

Magazine article American Banker

Wanna Make a Mortgage Payment? Write, Don't Visit, Says N.Y. Thrift

Article excerpt

In an unusually strident move to cut costs, a top New York thrift is barring customers from making monthly mortgage payments in branches.

Green Point Bank is requiring borrowers to make their payments either by mail or through automatic deductions from savings or checking accounts.

The policy, which has startled observers, flies in the face of thrift industry tradition. For decades, thrifts have prided themselves on delivering highly personal service to homeowners. Indeed, no major mortgage lender is known to have adopted a similar measure.

"That's exactly the reverse of what we do," said R. Frederick Taylor, president of the mortgage arm of Huntington Bancshares. "We like customers to come into our branches to conduct all types of transactions."

Still, some observers say the practice may well spread, as lenders across the country grapple with ever narrower profit margins.

"We're very motivated from a cost perspective and a service perspective" said Bernadette Arias, an executive vice president at the $13.6 billion-asset Green Point.

She said about 25,000 of the thrift's 75,000 mortgage customers made payments each month in branches, and that the transactions cost $2 to $3 each to process. Mailed payments, by contrast, cost the company about 45 cents per transaction, Ms. Arias said.

What's more, she said, the policy frees up tellers to help customers more quickly on other transactions. This is especially true between the 11th and the 15th of each month, when many mortgage customers used to pay in person at branches to avoid late fees, Ms. Arias said.

Green Point, one of the biggest mortgage lenders in the Northeast, began to test the ban earlier this year and now has it in place at all 74 branches. …

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