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Mortgages may be the first traditional banking product to lose market share to Web-based competitors. Why? It’s a significant consumer purchase, estimated to consume more than 80% of a household’s disposable income in the year of purchase. Second, with thousands of unregulated and highly competitive mortgage brokers scrambling to grab another tenth of a point of market share, innovation is a certainty.
| The Pioneers | |||
| Company | Claim to Fame |
| Update/Comments |
| Bank of America | First bank to create a nationwide network of cross referrals with Realtors (launched early 1995); first bank to provide access to public databases so that users could research home prices in a given neighborhood (tested in early 1997, launched in Mar. 1998). | For three years running, the BofA mortgage area has been one of the best examples on the Web of how to approach this market; but now all bets are off, as company works through headaches of merger with former rival NationsBank. | |
| Bank of Montreal | Launched real-time mortgage approvals Feb. 1997; developed four “doors” into its mortgage Web for first time buyer, trade-up buyer, refinance buyer, and current mortgage customer. | Named OBR Top Milestone of 1998; 15 months later still the only bank in the world with real-time mortgage approval; still using the four doors approach on its Web, an indicator that it’s effective, but graphics need to be modernized. | |
| Countrywide Home Loans | First major mortgage lender to embrace the Internet in 1996; an early leader in the development of a short prequalification process; uses email extensively to follow-up with Web prospects. | Still one of the few major mortgage lenders with a robust direct lending effort on its Web site (most others are relying on third parties such as QuickenMortgage or GetSmart to generate leads). According to Countrywide’s Cameron King, online application volume is growing 22% per month from the current level of 500/mo taken online; fundings are $31 million/mo (Mar. 98 data); recently became the first direct lender on the new Real Estate Financing page of AOL’s Personal Finance Channel. | |
| E-Loan | First mortgage broker to introduce state-of-the-art online lending capabilities (June 1997); first mortgage lender to integrate interactivity and email updates. | Currently generating 50-200 application per day from 285,000 visitors per month; received venture capital funding in December; became Yahoo’s exclusive loan center merchant in February; inked a similar deal with Lycos in April; also appears on dozens of home-buying sites across the Web. | |
| GetSmart | First company to execute a business model based solely on generating mortgage and credit card leads. | Received 114,000 leads in 90 days; in May announced a $13 million dollar marketing campaign for 1998 inking deals with Yahoo, Lycos, Wired Digital, Infoseek, and DoubleClick; total 3-year commitment at those companies slated at $50 million. | |
| Intuit | First major brand-name to launch loan referral services on the Web in Oct. 1997. | From Oct. 97 through Mar. 98, QuickenMortgage received 1.2 million visitors who completed 13,000 prequalification requests. Last month, added full online application capability and launched an online sweepstakes to drive traffic to its site. | |
| Salem Five | Developed an innovative prospecting tool, a $100-off closing costs interactive coupon, that has been in use since early 1995. | In 1996 and 1997 added real estate listings and other prospecting tools to boost its online sales volume. | |
| SmartCalc /FinanCenter | In late 1994, became the first lending-related Web site built around interactivity/calculators; SmartCalc division created in June, 1996 to license calculators. | Flagship FinanCenter site is generating 1.5 million page views per month, more than half in the home mortgage area. | |
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