Online Success: Fact or Fiction?Bill EvansOnline status, Internet, customer service, Alliance Funding, IndyMac Bank, NovaStar Mortgage, It is impossible to have a conversation with mortgage lenders without discussing the Internet and the way it impacts the industry. Most of these discussions have focused on the borrower because of the perceptions of the broker practitioner. Only a small amount of attention has actually focused on how the Internet affects the relationships between wholesale lenders and the broker/loan officer community. One of the initiatives currently generating the greatest payoff for both loan officers and wholesale lenders is providing electronic underwriting status and loan conditions via the Internet. Lenders are realizing the competitive advantages that an online status can bring to their total production and relationship building efforts. Three such companies are Alliance Funding, IndyMac Bank and NovaStar Mortgage. Each company has applied a different approach to utilizing the Internet, all generating positive results. Improved customer service, greater broker satisfaction, increased efficiencies and an increased quality of loan submission are some benefits of a definitive Internet strategy. Improved customer service is one of the most significant results of utilizing the Internet as a communications tool. Providing loan status on the Internet is one method. Brokers and bankers at Alliance Funding find that loan officers benefit greatly from the tracking system, which reduces phone time and provides instantaneous, updated information. IndyMac Bank packages the loan status as part of e-MITS (Electronic Mortgage Information and Transaction System). In addition to keeping loan officers up-to-date regarding the process of their loan, e-MITS provides immediate online underwriting, as well as risk-based pricing within three minutes. "Customers are able to capitalize on the efficiencies and immediacy that e-MITS provides at the point-of-sale," says Roy Bollinger, first vice president and director of marketing and development at IndyMac. "This capability has drawn rave reviews from our customers." By allowing loan officers to obtain loan status from the Internet, internal efficiencies for the lender have been created as well. Reduced calls to lenders about a loan, combined with their automated underwriting system, have doubled their ability to process loans without hiring a larger staff. By handling fewer calls, account executives are able to foster more involved relationships with consumers. Similarly, there is a reduction of status calls at IndyMac, allowing personnel to spend more time generating new business. e-MITS has allowed IndyMac to focus on the loans that are most likely to fund. Alliance Funding has seen an increased response from its customers as they have become more Web savvy. In addition to reducing phone time, Alliance has been able to produce more educated consumers. Customers who use the Internet to view their underwriting information also find that the site contains a great deal of rate and product information. Armed with this additional knowledge, they have a better understanding of which loans they should submit. "Customers are educated more quickly and are more likely to send higher quality loans," notes Rich Doran, senior vice president of production at Alliance. Therefore, the question becomes, "How do small- to mid-size wholesalers achieve similar advantages?" The lenders cited in this article are among leaders in the industry and have each allocated significant time and resources to build their own proprietary systems. Because "survival of the fittest" is a common refrain, many lenders are eager to capture the same advantages as their larger counterparts. Most smaller lenders have found developing a proprietary system to be quite cost-prohibitive. They have also concluded that without the same resources and economies of scale, they must seek other alternatives. Mid-sized lenders are then faced with finding the best way to efficiently utilize the Internet. If building their own proprietary system is not the most cost-effective approach, then what is? Online statusing is an ideal middle step for lenders who want to use the Internet as a tool, but lack the resources to develop their own automated underwriting system. As competitive pressures force the lending community to evolve, technology providers will inevitably recognize the need to cater to the online statusing demand. After speaking with these companies, it is clear that there is a consistently high level of satisfaction with the results they have achieved from their respective Internet strategies. There has also been a significant and positive impact to their bottom line, and their customers have been vocal in their praise of these online initiatives. These lenders have each raised the bar for the rest of the industry. It will be interesting to watch as others observe what the masses do. Bill Evans is president of the Institute of Professional Training in Manchester, Wash. He may be reached at (360) 981-4026, e-mail [email protected], or visit www.billevanspresents.com.