Magazine article American Banker

NovaStar Shooting to Double Up by Cutting Sign-Up Time

Magazine article American Banker

NovaStar Shooting to Double Up by Cutting Sign-Up Time

Article excerpt

NovaStar Mortgage Inc. says it will use speed and its own automated underwriting system to its advantage as it tries to give its loan correspondent business a big boost.

Speed is a key to the online NovaStarIS underwriting system, which went live last Wednesday.

"In 30 seconds brokers can complete an application and get multiple approvals back, saving them hours," said NovaStar Mortgage president and chief executive officer Lance Anderson.

The Kansas City, Mo., real estate investment trust and wholesale and retail mortgage lender specializes in A-minus subprime loans and securitizes 90% of the loans it buys and originates. Its parent, $2.5 billion-asset NovaStar Financial Inc., holds capital of $135 million, and NovaStar Mortgage's goal is to double the amount of loans it underwrites from brokers "to $4 billion a month," Mr. Anderson said.

"We want to capture the broker's desktop," he said.

Brokers using NovaStarIS enter the borrower's vital statistics and transmit the data to NovaStar. Because they do not have to fill out the complicated 1003 application form that other underwriting systems require, they input about a half-page of information instead of a full page, the company says.

If applications are missing information, such as that provided in W-2 forms, NovaStarIS will still approve the loans and tell the brokers the maximum loan-to-value ratio and the average monthly payment they could get if the borrower does submit the missing information. …

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