2006: the year the online retail mortgage makes the big leagues?

Author:Newman, William A.
Position:Executive Suite

THE CHICAGO WHITE SOX HAD QUITE A run this year. The Sox came from not even being expected to contend in their division to winning the World Series. In doing so, some of their biggest contributors were players who had been in the major leagues for a number of years but had never really distinguished themselves. Between individuals rising to the occasion and a complete team effort, the White Sox were able to rise to the top.

In many ways, online retail mortgages seem to be in the same position as the White Sox at the start of the 2005 season--been around for a while, not really being discussed or noticed very much recently, many good pieces to the online puzzle but never truly rising to the top. Is 2006 the year that retail online mortgage providers put it all together?

We have watched the Internet and eCommerce develop from a gleam in Al Gore's eye to one of the preferred methods for doing business in almost every industry, through a bubble-burst that evaporated paper billions to a household fixture--the "superhighway" of choice--with oodles of information at your fingertips and the ability to buy nearly anything from anywhere.

In the 1990s, investors and entrepreneurs approached eCommerce by throwing anything at the wall to see what would stick. Books, cars, auctions, even psychiatry could be purchased online. Some of these ventures turned out to be a slam-dunk; many did not. For example, let's take a look at eCommerce and cars: You can do fabulous research on the Internet and look at your dream car in cool colors with the roll of a mouse, but you still go to a dealership to argue that you don't need the corrosion-protection undercoat. Maybe that's the experience customers truly want, but somewhere out there is the "golden ticket." Can it be online retail mortgage originations?

While online origination has become an industry standard on the wholesale side, it still hasn't truly taken off on the retail side. Regardless of how much hype there is for any individual retail site, the fact remains that a steady annual population of about 93 percent of mortgage borrowers are still not compelled to choose the Internet to complete their retail mortgage originations.

Online already integral to wholesale

It's clear that as a Web-based transactional offering, wholesale mortgage lending joined books, music and airline reservations in taking off early and never looking back. All of these online categories continue to grow exponentially in functionality...

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