In early 1997, we began running feature stories on new online products and companies that pushed the envelope, i.e., were the first major deployment of useful new Internet-based products or features. Initially, we called them  “Innovations” or “Product of the Month.” Then during 1998 we transitioned into calling the best new features, “OBR Best of the Web,” a designation bestowed about two-dozen times since mid-1998. More than half of the winners have been in the loan arena, since that’s where we believe the most important developments have occurred. Table 1, below, summarizes the award winners in the lending space.

Table 1

OBR Best of Web Winners¹: 1997 to Present

category: online lending

Source: Online Banking Report, 6/01

(1)    Best of the Web winners are chosen for “pushing the envelope” by inventing or implementing a feature not widely available. Please don’t read anything else into the designation: for the most part, we have not checked the performance of the feature, the technological underpinnings, or even the business case. We are also not saying that a Best of Web winner is a superior company. That usually has little to do with the original invention and everything to do with the implementation.

(2)    Two-time winner; also won again in 2001 for new features

Online Mortgage Lenders Pioneer Innovative Features

Table 2

OBR Best of the Web 2001 Winners

mortgage, auto, and/or home equity

Source: Online Banking Report, 6/01; sites reviewed during May 2001

mtg = mortgage; heq = home equity loans/lines; auto = automobile loan; pers = personal loan/line; cc = credit card; biz = small business loan/line

*via link to a third party Web site

A Look at the Cream of the Crop

Table 3

OBR Scorecard: The Best of the Best

mortgage, auto, and/or home equity

Source: Online Banking Report, 5/01

(1) Evaluated in May, prior to a Web makeover, and in LoanDirect’s case, a name change and rebranding to E*Trade Mortgage

(2) LendingTree is great for rate shoppers IF they are willing to submit a complete loan application; otherwise there is no rate info. available

When we set out to find the companies pushing the envelope in online lending, our first stop was Gomez Advisors  www.gomez.com  Fortunately, it had just released its Spring Mortgage Scorecard  so we were able to look at very up-to-date evaluations. And we were impressed with what we found!

The top five lenders offer numerous innovative and customer-friendly features; by the time we’d looked at just the first 5, we’d compiled more than 50 pages of notes on innovative services. If you want a state-of-the art loan center, become familiar with the five mortgage superstars listed above (Table 3).

If you want to look even deeper, check out some
of the other top scorers in Gomez’s Ease of Use category Table 4, right). In addition to the five previously mentioned, ditech.com (a division
of GMAC) and East West Mortgage www.ewmortgage.com  scored well. Also, in the top eight are Infoloan.com and Intuit’s Quicken Loans www.quickenloans.com .

Table 4

Gomez Rankings by Ease of Use: Spring 2001

grouped by similar score (within 25 basis points)

Source: Gomez Advisors,  www.gomez.com  5/01

*similar scores grouped together

Conversion Percentages

According to Gomez, a wide gulf lays between the results of the best and worst online lenders (Table 5, right). For example, the best site was able to convert 12% of  site visitors into applicants vs. 0.3% for the worst, a 36-fold difference. But you shouldn’t read too much into these statistics. Highly trafficked sites would likely fall towards the bottom of the conversion percentage range. Without more data on site traffic, loan size, credit quality of applicants, and loan profitability, these percentages aren’t particularly meaningful.

Table 5

Gomez Mortgage Application Performance

Source: Gomez Advisors, www.gomez.com , 10/00; identity of the lenders was not disclosed