AOL, AppOnline Deal May Raise Consumer Comfort with Online Mortgages
November 1, 1999
The sweeping advantages of e-commerce may be pushing the real estate industry ever closer to the era of the e-mortgage. For real estate practitioners and their clients, that could alleviate what has been a major bottleneck in many transactions.
If online mortgage company companies have any say, it'll happen sooner rather than later. In fact, it could be argued that the mere presence and promotion of online mortgage application and approval services will legitimize the concept for consumers, just as many have been convinced of the advantages of buying goods over the Internet .
In 1998 less than one percent of mortgages were done online," notes Tom Soevyn, vice president of sales and business development with AppOnline.com Inc. one of this new breed of Internet mortgage companies, citing a study published by Forrester Research last January. That report, Credit At The Threshold, predicts online mortgages will account for 10 percent, or $9.1 billion of the total market, by 2003. "That's why everyone is getting excited," says Soevyn.
To realize those numbers, it is homebuyers who must get enthusiastic about entrusting the mortgage transaction to an Internet connection. For its part, AppOnline will use a share of a recent $2 million investment in the company by B.H Capitalto raise awareness of its services. Immediately following the investment, the company announced a deal with America Online's Digital City's network to feature AppOnline services on its real estate information pages. DigitalCity.com already features mortgage information and services from online mortgage company iOwn.com.
"What we want to do is raise the comfort level people have with online mortgage services," says Soevyn of the AOL/Digital City deal. "A lot of research [about Internet usage] has shown that people gain trust in online services from where they find access." And AOL is accessing a lot of users. It estimates that it serves more than 19 million members worldwide and averages six million visitors a month.
Soevyn expects as real estate practitioners become more familiar with the services such as AppOnline, they'll become an important source of referrals. He says salespeople will gain from the effort as these online services simplify tracking the mortgage process to facilitate the transition from final negotiations to closing.
The key thing for real estate salespeople is that they can know immediately what a buyer is pre-approved for. Once a mortgage application is submitted they can monitor the entire process, including all the documents related to the mortgage.
It's the efficiencies of electronic applications, quick response, and centralized data and resources that he believes could make the e-mortgage yet another winning example of e-commerce. "Real estate practitioners should be looking to online mortgage bankers as partners who can help move transactions forward much more quickly," says Soenyn. "We're trying to make this process as streamlined as possible."
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