Mortgage Web Sites: More Isn't More

April 1, 1997

Type in the words mortgage finance on any Web search engine, such as Yahoo or Alta Vista, and you'll find several thousand sites that promise to educate and prequalify consumers and keep you up-to-the-minute on interest rates and industry news. But what are they doing for your business? Apparently not much.

Not yet, at least.

Security Breaches

It seems everyone in the lending business, from local mortgage brokers to secondary market agencies, is posting loan qualification information on the Web. But several issues are making real estate professionals leery of these sites.

"Consumers who get prequalified online get a false sense of what they can afford. From that viewpoint, a lot of work still needs to be done," comments Patricia Neal, of Pat Neal Associates, Huntington Beach, Calif.

Rick Adams, president of Independent Mortgage, Corpus Christi, Texas, and a REALTOR®, says there's no way a computer can make the subjective judgments that lenders routinely make. "A consumer fills in the blanks in a mortgage calculator, and it either says yes or no. It eliminates some people and scares others off, whereas a lender may actually qualify them for a loan after finding out the circumstances of their financial problems. So far we haven't seen any technology that has an artificial intelligence capability to make those subjective decisions."

A lack of security is also preventing a stream of visitors to finance sites. "Mortgage brokers require information of a sensitive nature, and the risk of security breaches hasn't been fully addressed," says Adams. Lupe Silvas agrees: "Who knows who gets at that information before it gets to the mortgage broker?" Silvas is a salesperson with Front Door Realty, Corpus Christi, and also develops Web sites for mortgage companies. He sees the sites as valuable for dispensing information, but acknowledges that collecting private financial data will be a challenge until security concerns are addressed.

According to Silvas, there's another reason real estate professionals are staying away from the Web. "People still want some face-to-face contact," he says and then half jokingly adds, "The real estate professional and buyers and sellers want somebody--a person--they can chew out if a loan isn't approved."

But real estate professionals do see some value in mortgage finance Web sites. "We spend a lot of time educating people. If consumers come to us with more knowledge about the homebuying and financing process, it's going to cut a huge chunk of time out of our preliminary work," says Silvas.

That's beginning to happen. "Generation Xers, especially, have come in, and they're able to tell us what they think they can afford," says Neal. "They've gotten that information by going to some of the mortgage sites. I think we're going to see more of that."

Carylon Dopp, a salesperson with Security Pacific Real Estate, Richmond, Calif., doesn't see her techno-savvy prospect coming to her wiser about the financing process, but she's hopeful. "I do think there will be changes, and I think it'll be better for everyone. More informed prospects make better decisions. I want people to know as much as possible, and it's beneficial that they'll have the ability to do some of that learning on their own time."

Silvas predicts mortgage finance Web sites "are going to affect our business completely--revolutionize everything." But how the business will change is anyone's guess. What are some changes you should anticipate?

"A lot of salespeople will need more education to stay on a level playing field with buyers and sellers, who are going to be more savvy about what's going on," says Dopp.

Adams agrees: "As consumers become more sophisticated, it'll force practitioners to become more sophisticated, too. I think there's a lot of pressure on us to stay knowledgeable. It's going to be a difficult adjustment for a lot of people."

Test-Drive Some Sites

Here's a sampling of mortgage finance Web sites for you to test-drive. At the sites, you'll find industry news, glossaries of mortgage terms, mortgage calculators, and other information helpful to you and your prospects.

The list isn't comprehensive but rather provides a taste of what's available on the Web.

Elyse Umlauf-Garneau is a Chicago-based freelance writer and former senior editor with REALTOR® Magazine.

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