B2B Internet infrastructure estimated to help mortgage professionalsmortgagepress.comInternet mortgage strategies, B2B E-mortgage space, industry outlook, 2000
Robertson Stephens, a full-service investment bank focused
exclusively on growth companies, recently issued a report on the
outlook for the business-to-business (B2B) E-mortgage space.
"Connectivity is the key," says Senior eFinance Analyst Scott
Appleby. "Despite the obvious benefits of digital communication,
most industry participants today still interact with one another by
phone, fax, and express mail. We estimate that connectivity
solutions that increase processing efficiency, improve data
transfer, and enhance price discovery in both the primary and
secondary mortgage markets will generate cost savings that exceed
$12-$15 billion per year in the next 3-5 years."
According to the report, in the past five years, investments in
Internet mortgage strategies and technology have exceeded $1
billion. However, despite these massive outlays, investors have
been disappointed by slow consumer adoption and poor public company
performance. Mr. Appleby believes that these results misrepresent
the real impact that the Internet is having on the mortgage
industry. While only a limited number of consumers are borrowing
directly over the Internet, it is estimated that 30-35 percent of
mortgage consumers are using the Internet for research. In
addition, mortgage professionals are delivering more than 2.1
percent of loans to lenders using the Internet, an increase of 45
percent from the previous quarter, a trend that is rapidly
accelerating. The report predicts a wave of vertical consolidation
as mortgage B2B players position themselves for the public
markets.
Long term, Mr. Appleby anticipates a mortgage B2B infrastructure
solution that connects industry participants from the point of sale
to the capital markets. This will allow originators to provide
product selection and pricing based on real-time movements in the
securities and mortgage-backed markets.
