Magazine article American Banker

Study Sees Steady Growth for Internet-Only Lenders

Magazine article American Banker

Study Sees Steady Growth for Internet-Only Lenders

Article excerpt

Internet-only mortgage companies show great promise for continued growth in the immediate future, according to a study by Gomez Advisors, an electronic commerce research firm in Lincoln, Mass.

Nick Karris, a Gomez senior analyst, said consumers are dissatisfied with traditional means of obtaining financing and will keep flocking to the Internet for mortgages.

"It's easier to find a better deal shopping the Internet because you have access to more options," Mr. Karris said. What's more, he added, "the pure Internet plays are doing a better job of hand-holding the customer than they did earlier." And the Internet-only sites offer longer hours of service, faster turnaround, and on-line documents, he said.

Internet-only lenders topped Gomez's latest quality scorecard. E-Loan Inc. was No. 1, followed by iOwn, Keystroke Financial, and RockLoans.com.

To date, most of the on-line mortgage business has been refinancings. But Mr. Karris said the Internet's adaptability makes Internet-only sites viable in a purchase-loan market too.

"Because they are so flexible about adding new products," Mr. Karris said, "if one segment of business, like the refi market, slows down, they can adapt their resources and continue their growth to reach profitability in the near term."

But the top Internet marketer at Norwest Mortgage, a unit of Wells Fargo & Co., insisted that mortgage Web sites associated with banking companies have the edge. …

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