If there’s a sure way to torture consumers, this would be the one. Take the most stressful, complicated, banking experience—getting a mortgage—and try to do it on the most chaotic delivery channel around—the Web.

I set out to find a selection of mortgage lenders that really take advantage of the Web’s capabilities. Someone that solves the problems consumers encounter in looking for the best deal, and for coping with the mortgage process overall. Much to my surprise, the search was long and arduous. Mostly I ran across Web sites of entrepreneurial mortgage brokers, which tended to be long on family photos and glowing promises, but short on facts.

The typical bank effort was a one-page “We do mortgages, call for rates” (see p. 12-13 for exceptions). Where were the rate comparisons? The prequalification wizards? What about glossaries to tell me what ARM, and APR mean? What about an online application-tracking system to let me know how the process is going?

As far as I could tell, the only big name that has begun to master the medium is Countrywide Home Loans (Pasadena, CA; $157 billion serviced). According to industry reports, Countrywide is already receiving several hundred applications per month.

Countrywide’s Gold Credit area drives home its convenience message with: “Spend Your Time Shopping for a New Home, Not a Loan.” The 1.25% break on loan fees doesn’t hurt either.

Determining options
The first page of Countrywide’s site invites prospects to Go for the Gold and prequalify for its loan program for A+ credits. If you answer yes to six simple questions, you get to “go for the gold” which can save you up to 1.25 points. Basically, it’s a screening questionnaire that filters the “golden” prospects from those who might need a little more work.

After graduating to the Gold Credit area, Countrywide captures the user’s name, address and e-mail address then sends them to the Home Loan Wizard where monthly income and expense and home information is gathered. Users then receive a custom worksheet listing applicable loan programs complete with actual monthly payments.

For those who don’t answer yes to everything on the Gold Credit screening form—or who don’t have an offer on the table yet—there’s the plain vanilla Home Loan Wizard that provides available options. The output here is not as detailed as the Gold version. There is a button to immediately lock the rate and submit the loan (see p. 11 for the e-mail I got after running the wizard).

For users not quite ready to lock in rates, Countrywide offers a “tool shed” of useful calculators for determining: whether to rent or buy; amount of monthly payment; or how much house is affordable. The nice thing about the Web is that consumers can spend as much time as they need, in the privacy of their own space, running the numbers until they get to what is best for them. The end result is that when they do ask to be contacted, they’re more informed and take less of the loan officer’s time hashing out the various options.

Educating consumers
Interactive calculators are an important component of a good mortgage lending site, however Countrywide goes further to help de-mystify the mortgage process. In addition to a glossary that’s larger than most banks’ Web sites, they take advantage of numerous hyperlinks to highlight particular concepts. For instance, in the product description for its Gold offering, the prospect can quickly click to get a detailed overview of the implications of choosing a loan with or without prepayment penalties.

One feature that falls short, though, is Countrywide’s library search engine. The only thing it really works for is looking up a term in the glossary. Typing in “prepayment penalty” got me to the FAQs for ARM loans and the glossary page for “P”. The thorough explanation I had received earlier about prepayment penalties didn’t even make the list. Typing in “15-year mortgage” took me to the “Y” page of the glossary. I was expecting information on 15-year loan programs or the pros and cons of 15-year mortgages vs. the conventional 30-year product. The lesson here is that on-site search engines must be customized to ensure that valid information is returned to the user.

Countrywide’s Web features a sign-up form for direct (pre-authorized) debit of payments.

After the loan closes
Once the loan closes, Countrywide provides even more online benefits. Customers can access account information such as current payment amount, payment due date, amount of the last payment received, and current interest rate. In addition, Countrywide provides a simple e-form to sign up to have the payment deducted from any checking or savings account (see screenshot). Users can select from four payment dates (1st, 3rd, 5th, 10th) and can choose to set-up additional principal payments as well.

Targeting Realtors
Recognizing the importance of Realtor referrals, Countrywide has built a separate site called Realtor’s Advantage, part of which can only be accessed by registered users. The online RealtorZine does not require registration. It’s a good concept, but it has not been kept up-to-date. It suffers from a common ailment among online newsletters: old age. Online periodicals need to be updated periodically. If the information is static it shouldn’t be positioned as a ‘zine.

The Solutions section, however, offers tools that should make the site worthwhile for Realtors. It includes online prequalification, application tools, and communication links to Countrywide lenders. Realtors can check loan status online, receive confirmation of buyer preapprovals and have priority e-mail communication with branch managers and underwriters.

These communication tools should be made directly available to all applicants. After all, uncertainty about the status of the mortgage loan is one of the most stressful parts of the whole process. How comforting to know that you and/or your Realtor have online access to your lender. Other items slated to be added to Realtor Advantage include expert advice for specific questions, loan guidelines, and title and appraisal services.

Analysis: Good design combined with effective interactivity
In summary, Countrywide gets high marks for its effort. And, with a couple of exceptions, its execution matches its ambition. We especially like how Countrywide draws users into the application process with interactivity and intrigue (“Go for Gold” checklist) combined with good old-fashioned discounting (1.25% off closing).

It happens so smoothly, you hardly notice you are going through the normally tedious application process. After piquing your interest with a spinning gold icon on the first page, Countrywide gradually draws you into the application, first capturing basic information, then feeding it back in a helpful format. Then getting even more information, and poof, you’ve applied for a mortgage. But by that time, you’re sold. You’re a “gold” customer and you’re saving 1.25% to boot. You’re ready to close the deal.

There’s nothing sneaky about it, it’s just good online salesmanship. All Countrywide needs now is to beef up its post-application support to match its pre-application sales process, and they will have a virtual winner.