SOURCE: Mortgagebot

mortgagebot

October 10, 2011 11:00 ET

New Study on Mortgage Lending Illustrates Remarkable Gains for Lenders Who Embrace the Online Channel

Online Lenders Reap Success by Capturing More Loan Applications and Higher-Quality Borrowers, According to Mortgagebot's Nationwide Study of 1,000 Lenders and Over 6,600 Web Sites

MEQUON, WI--(Marketwire - Oct 10, 2011) - Results from Mortgagebot LLC's (www.Mortgagebot.com) Benchmarks 2011 Report -- a one-of-a-kind study of more than 500,000 consumer-direct online mortgage applications submitted in 2010 to nearly 1,000 mortgage lenders -- identifies methods that optimize lenders' online presence and maximize application volume with high-quality borrowers. The study demonstrates that lenders with competitive online rates, optimized websites, and integrated point-of-sale platforms are best positioned to succeed on the Web. In fact, in one segment of the study, such lenders were able to garner eight times more online application volume than their less successful counterparts.

"What better use of Mortgagebot's unparalleled access to nationwide information on online mortgage lending than to analyze factors that influence online lending success like user behavior, website configuration, marketing strategies, and borrower demographics," says Rick Allen, Mortgagebot's Senior Vice President of Client Services. "The study's breadth of information gives banks and credit unions a vital tool for success in the consumer-direct, Web-based mortgage channel."

Study Stresses Business Necessity of Lenders' Online Presence

Borrowers are going online to shop for mortgages in record numbers, which plays into the hand of lenders that have deployed a robust, online, mortgage-origination solution. According to the study, lenders' use of the online channel is maintaining rock-steady momentum, with approximately 40 percent of surveyed lenders taking more than 25 percent of their loan applications online. The following trends illustrate the necessity of a fully transactional, online channel as a core component of a lender's business strategy:

  • Mortgage shoppers actively research interest rates online. Among visits to lenders' websites, 54 percent were to check rates. This fact suggests that lenders need to present accurate, risk-based, pricing and detailed fee quotes to meet borrower expectations.

  • Mortgage shoppers will devote time to complete online loan applications. The study revealed that more than one in six visitors spent more than 16 minutes on a lender's website (excluding visits of less than a minute). If they don't have enough time to complete the application, they'll come back -- 48 percent of applications were submitted over multiple sessions and 90 percent of the returning users submitted their application within two weeks of starting it. This behavior underscores the online lenders' need for an easy-to-use, hassle-free, Web application that allows borrowers to save and return to their application.

  • Mortgage shoppers are highly inclined to submit applications online. Given a simple, optimized, application experience, 72 percent of online borrowers who were eligible to complete their loan application online, chose to do so. To achieve this level of pull-through, lenders need to present borrowers with a simple, straightforward, online application interview.

Allen says demystifying the online channel for mortgage lenders through these data trends gives lenders a practical advantage. He adds, "With this data, our lenders can benchmark the success of their websites and pinpoint methods proven to be most effective in increasing loan volume. And mortgage lenders that have not embraced the online channel can see what's possible with the right tools."

Lenders Benefit from Online Borrowers' High-Quality Credit Profile
Mortgage lenders that take advantage of the online lending don't just open a new distribution channel, they open a business source that is characterized by outstanding credit quality. The study reflected that online applications in 2010 had a median credit score of 757, a median household income of $90,000, a median borrower age of 42, and a median loan-to-value ratio of 70%.

"These statistics mean that online lenders not only gain efficiency by having the borrower complete their own mortgage application on their own time, but they are able to increase their revenue with a higher application-to-closing rate because of the amazing credit quality of online applications," Allen noted.

Most Efficient, Optimized Online Presence Reaps Greatest Benefit
The study, which aggregates data from Mortgagebot's PowerSite platform, responses from its annual partner survey and independent research, further shows that lenders who not only maintain online presence to reach consumers but also adopt an efficient online platform reap the greatest rewards. The study shows:

  • Borrowers want to apply on their own terms. More than one in three consumers elects to apply online during non-business hours, when branches are closed. Lenders without self-serve functionality are missing a tremendous opportunity.

  • Simple navigation increases the likelihood of capturing applications. A panel of testers took 20 percent more time and 24 percent more clicks to reach the application entry page for less successful sites. More successful sites reaped eight times more loan volume.

  • Lenders gain efficiency with a single, integrated, point-of-sale platform. Deloitte's 'The Silver Lining in Lending' said "We believe lenders need to make it seamless for a consumer to begin an application online... and then complete the application wherever they feel most comfortable. This is only possible if a lending institution tightly integrates data across all channels." Mortgagebot's study, which revealed that 45 percent of the surveyed lenders originate more than half of their loan volume through Mortgagebot's multi-channel platform, confirmed that best-practice online lenders are embracing channel integration at the point of sale.

"In a tightened mortgage market, lenders who aggressively adopt the online channel through multi-channel integration certainly gain an upper hand by providing the consumer the ultimate in consumer convenience," notes Allen. "Lenders deploying such a platform can seamless transfer a partially completed online application to their call center, branch, or loan officer channel to both enhance the borrower experience and increase their application submission rate."

About Mortgagebot

Mortgagebot (www.Mortgagebot.com), a D+H company, has led the industry since 1997 by providing the unique, award-winning PowerSite® family of integrated point-of-sale (IPOS) solutions for taking mortgage applications in every mortgage business channel: consumer-direct via the Internet, in the branch or call center; or through professional loan officers. Mortgagebot blends deep mortgage experience with innovative "cloud computing" technology to create scalable and affordable websites for more than 1,000 banks and credit unions nationwide. Lenders large and small view PowerSite as a "must-have" solution because it helps them deliver a superior borrower experience, increase volume, and compete more effectively. PowerSite is also flexible and easy to use, with a rapid and proven implementation process.

Mortgagebot, Mortgagebot PowerSite, and Mortgage Marvel are registered trademarks of Mortgagebot LLC, a wholly owned subsidiary of Davis + Henderson Corporation.

Other products and/or services are the property of their respective owners.

Contact Information

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