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Forward on reverse--Reverse mortgage law: What you need to know—Part two

Apr 26, 2005

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.
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