What a difference five years make. -- The fifth annual Internet Mortgage Industry Survey, conducted exclusively for Mortgage Banking by Myers Internet Inc., clearly indicates that the Internet is now mainstream and has permeated every facet of the mortgage industry. -- Looking back at how far the mortgage industry has come from its first experience with the Internet reveals a substantial transformation. -- "I've watched it go from such an unformed channel to a legitimate, viable channel. It's interesting to see how uncharted everything was and how it formulated into a comprehensive business model." So says Sean Marsh, senior vice president of business development for Alliance Mortgage, Jacksonville, Florida.
In the Myers/Mortgage Banking Internet mortgage survey for 2001, a resounding 88 percent of lender respondents indicated they plan on continuing their Internet presence, clearly demonstrating that the Internet adds significant value to their business (see Figure 1). In addition, 43 percent of the companies surveyed had been doing business on the Internet for more than three years (see Figure 2), compared with just 21 percent in the 2000 industry survey.
Michael Moore, director of business development for Deep-Green Bank, Independence, Ohio, says about the Internet, "It works--people shouldn't be shocked by it. Just take it for granted." Another survey respondent noted, "The Internet is an integral part of our business. We could not operate without the ability to use e-mail, access other companies' Web sites and have customers access ours. The best feature of the Internet is that it is on 24/7/365."
This was the second year that the survey was conducted completely online. The link to the survey was also sent out to more than 3,000 mortgage companies via e-mail. Our list of online mortgage companies was compiled from research done through major Internet search engines as well as the leading mortgage aggregators. A total of 616 companies completed the survey.
The consumer survey was conducted online at loanapp.com, bestrate.com and mortgage-net.com, and a total of 507 consumers completed the survey. To conduct the survey, Myers Internet Inc. used online tools provided by Zoomerang, a leading provider of online customer surveys.
The primary benefits
The primary benefit of the Internet is that it enables mortgage professionals to be more efficient and originate more loans in less time. While 42 percent of survey respondents indicated that the Internet is a significant source of new business, more than 56 percent indicated that the Internet is a useful tool to market to existing customers. This implies that the Internet may be even better-suited for customer retention than customer acquisition.
Consumers have embraced the Internet, thereby making it a viable medium. The majority of consumers surveyed have been using the Internet for more than four years, and 82 percent of them have made an online purchase (see Figure 3).
The fact that the Internet is now mainstream is also evidenced by the fact that the average household incomes for Internet users is dropping. Seventy-five percent of the consumers surveyed had household incomes of less than $60,000 per year. In prior years' surveys, the average incomes of Internet users were much higher. While average household incomes for Internet users is still higher than average U.S. household incomes, the disparity is shrinking.
Consumers love the convenience of using the Internet, along with the ease of access to educational tools and content. Interestingly, while 83 percent of consumers said they would complete an application online, only 20 percent of them had actually done so. (These numbers might appear to be high--and rightfully so, because the survey respondents were consumers who were browsing online mortgage sites. Had the survey been conducted with consumers at random, the number likely would have been lower. …