E*Trade Mortgage has a more pleasing overall appearance than IndyMac, but it doesn’t do as much to boost applicant confidence in the process and company. However, the new E*Trade branding provides a much-needed credibility boost.

(Ed. Note: The company and Web site was relaunched as E*Trade Mortgage on June 18. Our evaluation is of the previous LoansDirect product and Web site design. Many of the core features remain unchanged.)

 The Company

The company was originally launched in 1983 as Tricor Mortgage and renamed LoansDirect in 1999. When it was acquired by E*Trade on Feb. 1, it was already a major online player with a number 2 ranking on Gomez and one of the highest online loan volumes . E*Trade has originated nearly $1.5 billion in loans in the four months since it took over the former LoansDirect (Feb. 1 through May 31), with another $546 million locked in the pipeline. May volume totaled $494 million alone.

It appears E*Trade Mortgage may be on track to become the largest direct originator of online retail mortgages. In Q1 2001, it ranked behind Countrywide, LendingTree, and MortgageIT on Inside Mortgage Technology’s list of top originators.  However, Countrywide includes telephone originations in its total, so its true Internet total may be less than E*Trade Mortgage’s. And if its rapid growth continues, E*Trade Mortgage could outpace MortgageIT and LendingTree in 2001.

table 1

Gomez Scores: E*Trade Mortgage vs. IndyMac

Spring 2001

Source: Gomez Advisors, 5/01  Note: called LoansDirect on the scorecard.

Catching IndyMac

Even though IndyMac has the number one ranking on Gomez, E*Trade Mortgage’s score is so close, a mere 4 basis points lower (6.55 vs. 6.59), that statistically the two companies are tied for first. E*Trade Mortgage has been gradually closing the gap during the past three scorecards. In Fall 2000, it scored 22 basis points less than IndyMac (6.58 vs. 6.36). The gap fell to 8 basis points in Winter 2000 (6.52 vs. 6.44).
 

E*Trade Mortgage trails primarily because of its Ease-of-Use score, a full point behind IndyMac (see table 1, previous page). If the mortgage unit can maintain its customer focus in the aftermath of the merger, it could overtake IndyMac in the next scorecard, especially with its tighter integration to E*Trade and E*Trade Bank.

table 2

E*Trade Mortgage’s Best of the Web 2001 Features

Source: Online Banking Report, 5/01

E*Trade Mortgage Satisfaction Guarantee

1. No Obligation, No Application Deposits. At LoansDirect there is never an up-front fee to apply, and if you are ever dissatisfied with our service or our rates, you may cancel without any cancellations fees or obligation.

2. Guaranteed Low Rates and Fees. We are the lender, saving you middleman commissions and add-ons. If we can’t beat a competitor’s rate and fees, we’ll give you $500 at time of close even if you close with someone else.

3. Guaranteed On Time Closing. Work with an experienced online lender. We have performed thousands of loans online. Don’t rely on an “Internet start up” and lose sleep over closing deadlines. LoansDirect guarantees that your loan will close on time or we’ll pay you $500.

4. Guaranteed Fees. Once you are locked in and approved, LoansDirect guarantees that our Total Value Price quoted to you at the beginning of the loan process will not change at time of close. No more worries about how accurate a Good Faith Estimate is.

5. Our $100 Call Back Guarantee. LoansDirect guarantees you will receive a call from a loan representative within 60 minutes of submitting a completed online loan application during our regular business hours, or we will pay you $100 at the time of closing! This is one more way LoansDirect guarantees you will receive the service you deserve.

Source: Company Web site, 5/01

Like IndyMac, E*Trade Mortgage also provides up-to-date competitive rates and fees. One big difference, it doesn’t show its own price for comparison, leaving that somewhat difficult task to the borrower. 

 

My Loan Team is another superb touch. The innovative approach includes a private Loan Consultant (salesperson), Loan Coordinator (takes it through closing) and Loan Manager (the supervisor you can contact if there are problems).

Seen in this demo, E*Trade includes pictures, phone number, email addresses, and whether each staff member is currently in the office.

A brave feature from E*Trade Mortgage. Within 24 hours of the close of each loan, an email customer satisfaction survey is sent to all borrowers. The answers are automatically posted to this public Web area in real time. Although direct comparisons are difficult, E*Trade’s appears to score lower than MortgageBot, which also posts its scores to the Web. For example, 67% of MortgageBot users rated the overall experience Excellent, compared to only 43% at E*Trade. The scores are also shown in graphical format lower on the page.

E*Trade offers a useful and fast home value report from HomeGain. Any user (you don’t even have to register) can type in a street address and in less than 30 seconds have a full valuation derived from the home’s assessed value, most recent sales price, sales date, year built, number of bedrooms and baths, and home and lot size. User’s can change the data reported, e.g., add a bedroom and get a new estimated valuation. Finally, the service provides a list and map of other home sales in the neighborhood.

List of comparable sales in the neighborhood.

Map of comparable sales.

E*Trade’s Neighborhood Report provides census data by zip code compared to state and national totals. There was a small error in our report, which compared our Seattle neighborhood to New York state instead of Washington.

Report choices:

•    Demographics Report 
•    Risk Assessment Report 
•    Income Assets and Debt Report  
•    Lifestyles Report 
•    Cost of Living Report 
•    Single Area Summary Report

After clicking on the DirectConnect button in the upper right corner, a screen pops up with four choices for immediate contact: Direct Messaging (aka online chat), Internet Voice with no need for a second line (provided by Centrecom), toll free voice, or email with promise of immediate response.

The company offers two application choices: Express Application, which covers only basic info and then moves the rest of the process to the phone; and Online Instant Approval, which is a complete mortgage application evaluated in real-time.

Express Application (page 1): Input form, page 1 of 2. Users can switch to the full application at any time and all information is saved from previous screens.

Express Application (page 2): Input form, page 2 of 2.

Express Application (page 3): Loan Choice. Note the “Low Cost Promotional Rate,” a no-points, $995 fee product (see next screenshot) that happened to be a very low-priced mortgage the day we stopped by. Users can also select from the usual laundry list of fixed and adjustable products, all with clearly stated APR, points and monthly payments. Guaranteed closing costs are one-click away (second column from the right).

Express Application (page 3b): E*Trade does a great job making burdensome fee information affordable and understandable. On this $100,000 loan application it charged a flat $995 guaranteed for all lender fees including credit report, appraisal, etc. They also listed an ESTIMATED $450 for other third party fees including escrow agent and title insurance; and below this table, another ESTIMATED $600 for prepaid interest.

Express Application (page 4): Review and Submit triggers a credit report and a call from a sales rep to finish the application.

Full Application (page 1 of 6): Users may switch to the Express Application at any time and your information is saved.

Full Application : Users may navigate to any section of the application prior to completing an earlier section.

Full Application (page 4): Pop-up help is adjacent to most questions. There are also calculators located by each numerical question to assist in answering.