The Internet's adoption curve: the latest findings from the 2003 Internet Mortgage Industry...

BASED ON MORTGAGE INDUSTRY SURVEY RESPONDENTS from the sixth annual Internet Mortgage Industry Survey, conducted exclusively for Mortgage Banking by Myers Internet Inc., the average cost per closed loan for Internet-generated loans is approximately $300. In addition, 52 percent of respondents

agreed that loans could be originated over the Internet at a lower cost than through traditional media (see Figure 1). @ While 52 percent may not seem an overwhelming majority, our 2003 survey results also indicate there is a growing "digital divide" between companies succeeding on the Internet and those that are not. Based on survey data and comments from this year's respondents, I estimate that approximately 20 percent to 30 percent of mortgage companies surveyed do not have the where-withal to succeed on the Internet. @ Yet the conclusion supported by these findings is the Internet is a low-cost medium only for those companies that have embraced the medium. One critical question has yet to be answered: Will the savings obtained by using this low-cost medium result in higher profits? @ Seventy-seven percent of consumers surveyed this year expected to get lower rates by shopping on the Internet. And by pure coincidence (perhaps), 77 percent of mortgage companies surveyed also agreed the Internet consumer is more price-sensitive than any other group of mortgage consumers. Thus, it appears most of the savings obtained by using the Internet will be passed on to consumers.

This survey's findings suggest we are only a few years away from a complete online process being made widely available to most consumers. However, the need for human touch is even greater than before, and Internet technology will work side by side with expert mortgage professionals. Interestingly, the credit quality of Internet mortgage consumers may tend to be more challenging, thus requiring more involvement by a mortgage professional to win loan approval. Our survey findings showed that 62 percent of consumer respondents said they had only fair or poor credit.

Survey methodology

We conducted two distinct surveys--an industry survey and a consumer survey. These surveys were conducted completely online.

The link to the industry survey was sent out to more than 5,000 mortgage companies via e-mail. Our list of online mortgage companies was compiled from research done through the major Internet search engines, as well as the leading mortgage aggregators. A total of 334 companies completed the survey.

The consumer survey was conducted online at www.loanapp.com, www.bestrate.com and www.mortgagenet.com, and a total of 493 consumers completed the survey.

To conduct the survey, Myers Internet Inc. used online tools provided by Zoomerang, a division of Mill Valley, California-based MarketTools. Some of the questions permitted multiple answers; in these cases, the total response ratio may add up to more than 100 percent.

Key findings from the 2003 survey

CONSUMERS ARE INCREASINGLY USING THE INTERNET TO TRANSACT BUSINESS.

In this year's survey, 66 percent of consumers said they were using the Internet to obtain a mortgage (see Figure 2). This is dramatically higher than last year's survey, where only 24 percent of consumers were looking to obtain a mortgage. In prior years, a much greater percentage of consumers were using the Internet for research and not using it actually to obtain a mortgage.

Clearly, this medium is maturing and consumers are getting increasingly comfortable transacting online. In fact, 83 percent of consumers surveyed had previously made a purchase on the Internet. Also, the majority of consumers (52 percent) have been using the Internet for more than five years.

As a result, we should expect consumers to become increasingly willing to complete the entire process online should it be easy and inexpensive.

THERE IS A DIGITAL DIVIDE.

While some companies are able to leverage the Internet and make it profitable, there are still companies unable to make that leap. This is especially evidenced by the data on Internet close rates. The highest number of responses were at two extreme ends of the spectrum--29 percent of respondents had close rates of under 2 percent and 28 percent had close rates of greater than 25 percent.

In addition, many of the comments from survey respondents regarding the Internet were also either very positive or very negative (see sidebar).

Clearly, some companies are making the transition to embrace the Internet as a medium while other companies are unable to do so. However, since it does not appear that the Internet is inherently a more profitable medium, companies that develop effective offline strategies should also be able to succeed in the future business environment.

MOST COMPANIES ARE TAKING ONLINE APPLICATIONS.

In this year's survey, 83 percent of industry respondents agreed that having an online loan application is essential--an increase from the 72 percent response in last year's survey.

Consumers also are increasingly willing to apply online. In this year's survey, 93 percent of consumers indicated that they would be willing to apply through a secure online application, compared with 83 percent in last year's survey.

Having the consumer apply online is convenient for both the consumer and the mortgage company, and results in lower production costs. Clearly, a loan originator can only take one application at a time, while a Web site can take many loan applications simultaneously. In addition, the Internet is open 24/7 while most companies are only open during business hours when their customers are also working.

One of the reasons why the Internet is a low-cost medium is that some of the work that traditional originators do is transferred to consumers. Internet consumers tend to do a lot more research on their own. As a result, they are much better informed than the average consumer. Many of the best Web sites have extensive content and tools that automate some of the functions performed by traditional loan originators. In addition, having consumers fill out their own application online also saves time for the loan originator. This means loan originators who work with Internet consumers are more efficient than originators who work with consumers through more traditional channels. As a result, I would expect that loan originators working with Internet consumers are paid less per transaction than loan originators working with consumers through traditional channels.

MOMENTUM FOR A COMPLETE ONLINE PROCESS IS BUILDING.

Companies that have experienced the benefits of the Internet are increasingly interested in leveraging this advantage in other areas of their business. Eighty-nine percent of survey respondents agreed that by 2005 it was likely most Web sites would offer online disclosures, while 71 percent agreed it was likely that complete instant online approvals would be available. In addition, 83 percent of consumers surveyed indicated that they would be willing to complete the entire process online if it was possible.

Since a fully online process would be cheaper for companies and is also preferred by consumers, companies that can cost-effectively deploy such a system would stand to have a competitive edge. As a result, we should expect to see acceleration toward automating the various parts of the transaction over the next few years. While this technology is available in limited use under some best-case scenarios, it is currently not available to most mortgage companies.

INCREASED AUTOMATION WILL INCREASE THE NEED FOR ACCESS TO EXPERIENCED MORTGAGE PROFESSIONALS.

Eighty-one percent of consumers indicated that it was important to have access to an experience mortgage professional during the loan process. This number has increased slightly from last year. So while consumers prefer an online process, they also prefer having access to an expert loan counselor.

Therefore, while a completely online process may reduce the need for processors and clerical staff, it is not likely to reduce the need for loan counselors. In fact, as the mortgage process becomes increasingly a complete online process, the need for outstanding customer service also increases. Forty-eight percent of consumers surveyed indicated that having good service was an important factor in choosing a mortgage company.

The first contact consumers are likely to have with a mortgage company is with a loan counselor who can answer their questions and walk them through the mortgage maze. If rates were about the same, consumers are more likely to choose companies that are able to provide expert advice in a timely and professional manner.

COMPANIES ARE BECOMING INCREASINGLY DEPENDENT ON THE INTERNET.

Eighty-three percent of survey respondents indicated that they plan on continuing their Internet presence, while 80 percent agreed that having an online loan application is essential.

In my experience, once companies have embraced the Internet, they often build business processes around the medium. Many of these companies are increasingly dependent on the Internet in conducting their business, and are unable to function if the Internet is down.

Many industry survey respondents pointed out that problems plaguing the Internet--such as computer viruses and the large amounts of unsolicited e-mail--are hampering their efforts to use the medium to its fullest advantage. I expect that most mortgage companies will need to become increasingly tech-savvy or will need to outsource their technology platform to service providers with expertise in the area.

CONSUMERS EXPECT MORTGAGE WEB SITES TO HAVE SPECIFIC CONTENT AND TOOLS.

More than 95 percent of consumers surveyed stated that having the following Web site features was important: accurate, up-to-date rates; informative content; loan status tracking; a privacy policy; and an online application.

As consumers become increasingly familiar with using the Internet, they will continue to demand feature-rich sites that give them the necessary information to make a decision. As a result, brochureware sites increasingly will be considered archaic.

The good news is the cost of developing such feature-rich sites has continued to drop. As the online mortgage process becomes increasingly well-defined, mortgage Web sites themselves will become increasingly commoditized, and the cost of developing Web site technology will continue to decrease while the features offered by these Web sites will continue to increase.

THE INTERNET IS RESULTING IN INCREASED COMPETITION.

Consumers appear to be increasingly willing to shop both local and out-of-state companies. While 27 percent of consumers surveyed said that working with a local company was very important, only 12 percent said that they would do business with a local company if they could get better rates with a company that was 2,000 miles away or more.

As a result, consumers are increasingly pitting local companies against out-of-state companies in order to get the best combination of price and service. Because consumers do not have a strong need to interact face-to-face, multistate companies with strong telephone customer service and competitive pricing should be able to increase their market share.

However, many smaller companies have been able to expand their operations using the Internet. With physical presence becoming less important, we expect competition to continue to increase, resulting in lower gross margins.

AGGREGATOR SITES ARE HERE TO STAY.

Overall, the majority of consumers indicated that they prefer aggregator sites compared with single-lender or broker sites. There are two types of aggregator sites--bidding sites and rate-comparison sites.

Seventy-one percent of consumers surveyed indicated that they like bidding sites--sites that can take their loan request and submit it to multiple mortgage companies for bidding. This is also evidenced by the success of aggregator bidding sites that offer this type of service, such as Lending Tree (www.lendingtree.com), LoanApp (www.loanapp.com) and GetSmart (www.getsmart.com). These sites are convenient and result in increased efficiencies for both consumers and lenders.

Through bidding sites, consumers can apply once and get multiple quotes, which cuts down the amount of time they need to shop for a mortgage. Mortgage companies also benefit, because they can obtain highly targeted consumers. Most successful aggregator bidding sites provide highly sophisticated filters that enable mortgage companies to receive qualified loan requests in real time.

There has been a proliferation of aggregator bidding sites over the past year, and there is likely to be a shakeout as refinance loan volume dries up leaving more aggregator sites chasing fewer consumers.

Another type of aggregator site that is popular is a rate-comparison site. Mortgage companies typically post their rates through an online interface on a daily basis. These sites allow consumers to compare rates from a variety of participating lenders. Consumers are also typically provided with a hyperlink to the mortgage companies' Web sites and other information, in case they wish to contact the company directly. Examples of rate-comparison sites include BankRate (www.bankrate.com), BestRate (www.bestrate.com) and Interest.com (www.interest.com).

While the majority of consumers prefer using aggregator Web sites, only 27 percent of mortgage companies surveyed indicated that they use aggregator Web sites to obtain leads. In my view, this might be due to the fact companies have had abundant business during the refi boom and the need for marketing was diminished.

Many broker Web sites can also function as rate-comparison sites, if the broker's Web site can automatically shop for the best wholesale price and add the broker's origination fees to compute risk-adjusted retail pricing. These automated rate-quotation engines, which are very expensive to build, are now available at very affordable prices from a variety of service providers and are being used in thousands of mortgage broker Web sites.

INTERNET MARKETING MAY BE HARD TO SCALE.

Fifty percent of consumers surveyed indicated that the best way to find a mortgage company on the Web is to use search engines. However, there is a high concentration of Web site traffic in just a handful of search engines. Over the past two years, most of these search engines have replaced free listings with paid listings that are auctioned to the highest bidder. In my view, trying to continually increase Internet traffic to a Web site becomes increasingly difficult and cost-prohibitive.

Therefore, spending twice the amount of money advertising on the Internet may not result in twice the amount of online applications. In fact, after a certain point, Internet marketing appears to have reverse efficiencies of scale. This was clearly evidenced in the dot-com bust, where many mortgage companies went out of business simply because their Internet marketing efforts had reverse efficiencies of scale.

In addition, because most consumers prefer using aggregator sites (71 percent) rather than single-lender Web sites (6 percent), it may actually be harder for single-lender Web sites to attract consumer traffic if they are competing for eyeballs with aggregator sites.

Therefore, while the Internet is a low-cost medium, it may get increasingly expensive if companies try to continually increase their Internet marketing efforts.

What it all means

The Internet has become a key component of an overall origination strategy. Companies that have embraced the Internet have realized that this medium has its advantages and disadvantages over traditional media. In my view, those companies that employ the right blend of media strategies--using the strengths of each media to their advantage--are most likely to build long-term, sustainable businesses.

While the Internet is a low-cost medium, it may be hard for most single-lender sites to scale their Internet marketing efforts in a cost-effective manner. One solution may be to use a variety of aggregator sites. Another solution would be to use offline marketing to drive traffic to a Web site.

Based on our survey's findings, I believe a completely online mortgage process will soon be available and will be used by the majority of mortgage companies. In this environment, companies that provide the most competitive rates--combined with highly responsive and professional service--will thrive.

Companies that can build low-cost, customer-focused operations will clearly have a competitive edge as we go forward.

Figure I  Myers Internet Inc./Mortgage Banking 2003 Internet Mortgage
          Industry Survey

                               Number of  Response Ratio
                               Responses

1. Your company uses an Internet Web site for:

Retail                            257          78%

Wholesale                          65          20%

Correspondent                      37          11%

Customer retention                 58          18%

Servicing                          36          11%

Other                              29           9%

2. Your company has had an Internet presence for:

More than five years               67          21%

Four to five years                 43          13%

Three to four years                44          13%

Two to three years                 51          16%

One to two years                   54          17%

Less than one year                 67          21%

Total                             326         100%

3. Your company is a (please check all that apply):

Mortgage banker                    79          24%

Mortgage broker                   257          77%

Bank                               13           4%

Savings and loan                    1           0%

Other                              16           5%

4. The development of your company's Web site was:

Completed in-house                 60          19%

Outsourced to a Web
development firm                  203          63%

Mostly in-house, but some          18           6%
parts were outsourced

Mostly outsourced, but some        42          13%
parts were completed in-house

Total                             323         100%

5. Your company publishes its interest rates on the Web:

Yes                               171          52%

No                                157          48%

Total                             328         100%

6. Your company takes complete applications online:

Yes                               269          83%

No                                 55          17%

Total                             324         100%

7. Your company has an intranet:

Yes                               126          40%

No                                188          60%

Total                             314         100%

8. On average, how quickly does your company respond to Internet leads?

Less than one hour                 77          24%

One to two hours                   85          26%

Three to four hours                60          19%

Five to eight hours                25           8%

Nine to 24 hours                   63          19%

25 to 48 hours                     12           4%

More than two days                  2           1%

Total                             324         100%

9. On average, the number of leads generated per month on your Web site
is:

Less than 10                      190          59%

11-50                              75          23%

51-100                             33          10%

101-250                             9           3%

251-1,000                           9           3%

1,001-10,000                        6           2%

10,001-100,000                      1           0%

More than 100,000                   0           0%

Total                             323         100%

10. What percentage of loan applications taken from your site result in
closed loans?

Less than 1 percent                65          20%

1-2 percent                        28           9%

3-4 percent                        23           7%

5-6 percent                        20           6%

7-8 percent                         6           2%

8-10 percent                       29           9%

11-15 percent                      22           7%

16-20 percent                      15           5%

21-25 percent                      24           8%

26-50 percent                      37          12%

More than 50 percent               50          16%

Total                             319         100%

11. On average, the closed loan volume your Web site generates every
month is:

Less than $1 million              222          70%

$1 million-$2 million              46          15%

$3 million-$5 million              24           8%

$6 million-$10 million             12           4%

$11 million-$25 million             7           2%

$26 million-$50 million             1           0%

$51 million-$100 million            2           1%

$101 million-$250 million           2           1%

$251 million-$500 million           1           0%

More than $500 million              0           0%

Total                             317         100%

12. Please indicate the extent to which you agree or disagree with the
following statements:

Internet Usage Statements          Strongly Agree        Agree

The Internet is a significant           19%                22%
source of new business for your    (64 respondents)   (73respondents)
company.

The Internet helps in marketing         16%                34%
to your existing customers.        (53 respondents)   (114 respondents)

Loans can be originated via the         19%                33%
Internet at a lower cost than      (62 respondents)   (108 respondents)
traditional media (telemarketing,
radio, TV, print).

Internet leads have higher               5%                15%
closing rates than leads           (16 respondents)   (48 respondents)
generated through traditional
media.

Leads generated from your Web            6%                18%
site are better-quality than       (20 respondents)   (60 respondents)
leads obtained through
traditional media.

The Internet consumer is more           40%                37%
price-sensitive than any other     (133 respondents)  (122 respondents)
group of customers.

Your Internet site pays for             17%                36%
itself.                            (56 respondents)   (120 respondents)

You plan on continuing your             37%                46%
Internet presence.                 (122 respondents)  (153 respondents)

Having an online application is         47%                33%
essential to a mortgage company    (155 respondents)  (110 respondents)
Web site.

Having current mortgage rates on        17%                27%
your Web site is critical.         (54 respondents)   (87 respondents)
                                           `
Providing calculators and other         20%                39%
tools on your Web site helps your  (66 respondents)   (127 respondents)
company originate more loans
through the Internet.

The Internet is better-suited to         9%                31%
refinance business.                (28 respondents)   (103 respondents)

Internet Usage Statements               Neutral          Disagree

The Internet is a significant           21%                23%
source of new business for your    (69 respondents)   (77 respondents)
company.

The Internet helps in marketing         29%                14%
to your existing customers.        (96 respondents)   (46) respondents)

Loans can be originated via the         25%                16%
Internet at a lower cost than      (82 respondents)   (53 respondents)
traditional media (telemarketing,
radio, TV, print).

Internet leads have higher              35%                30%
closing rates than leads           (116 respondents)  (100 respondents)
generated through traditional
media.

Leads generated from your Web           38%                23%
site are better-quality than       (125 respondents)  (77 respondents)
leads obtained through
traditional media.

The Internet consumer is more           16%                 6%
price-sensitive than any other     (51 respondents)   (19 respondents)
group of customers.

Your Internet site pays for             22%                19%
itself.                            (72 respondents)   (62 respondent)

You plan on continuing your             12%                 2%
Internet presence.                 (41 respondents)   (6 respondents)

Having an online application is         13%                 4%
essential to a mortgage company    (42 respondents)   (14 respondents)
Web site.

Having current mortgage rates on        30%                19%
your Web site is critical.         (99 respondents)   (63 respondents)

Providing calculators and other         31%                 7%
tools on your Web site helps your  (100 respondents)  (23 respondents)
company originate more loans
through the Internet.

The Internet is better-suited to        39%                17%
refinance business.                (128 respondents)  (57 respondents)

Internet Usage Statements              Strongly
                                       Disagree

The Internet is a significant           15%
source of new business for your    (49 respondents)
company.

The Internet helps in marketing          7%
to your existing customers.        (22 respondents)

Loans can be originated via the          8%
Internet at a lower cost than      (26 respondents)
traditional media (telemarketing,
radio, TV, print).

Internet leads have higher              15%
closing rates than leads           (49 respondents)
generated through traditional
media.

Leads generated from your Web           14%
site are better-quality than       (47 respondents)
leads obtained through
traditional media.

The Internet consumer is more            1%
price-sensitive than any other     (4 respondents)
group of customers.

Your Internet site pays for              6%
itself.                            (20 respondents)

You plan on continuing your              2%
Internet presence.                 (8 respondents)

Having an online application is          3%
essential to a mortgage company    (9 respondents)
Web site.

Having current mortgage rates on         7%
your Web site is critical.         (24 respondents)

Providing calculators and other          3%
tools on your Web site helps your  (11 respondents)
company originate more loans
through the Internet.

The Internet is better-suited to         4%
refinance business.                (12 respondents)

13. By 2005 most Web sites will offer consumers:

                                   Likely                Neutral
Complete online approvals  71% (232 respondents)  19% (61 respondents)
in seconds

Ability to lock loans      63% (205 respondents)  23% (75 respondents)

Real-time status           77% (251 respondents)  19% (61 respondents)

Real-time, risk-adjusted   56% (182 respondents)  35% (113 respondents)
rates

Online disclosures         89% (288 respondents)   8% (26 respondents)

Closing loan documents     55% (180 respondents)  30% (99 respondents)
Digital signatures         63% (203 respondents)  25% (82 respondents)

                                 Unlikely
Complete online approvals  10% (33 respondents)
in seconds

Ability to lock loans      15% (48 respondents)

Real-time status            4% (14 respondents)

Real-time, risk-adjusted   10% (31 respondents)
rates

Online disclosures          3% (11 respondents)

Closing loan documents     14% (46 respondents)

Digital signatures         12% (38 respondents)

Myers Internet Inc./Mortgage Banking 2003 Internet Mortgage Industry
Survey (continued)

                      Number of  Response Ratio
                      Responses

14. The development cost of your Web site was:

Less than $1,000         138          44%
$1,000-$2,500             77          24%
$2,501-$5,000             59          19%
$5,001-$10,000            20           6%
$10,001-$50,000           17           5%
$50,001-$250,000           1           0%
$250,001-$500,000          1           0%
$500,001-$1 million        1           0%
More than $1 million       1           0%

Total                    315         100%

15. The monthly maintenance fee for your Web site is:

Less than $50             66          21%
$51-$100                  96          31%
$101-$250                 92          29%
$251-$500                 42          13%
$501-$1,000                8           3%
$1,001-$2,500              5           2%
$2,501-$5,000              2           1%
$5,001-$10,000             1           0%
$10,001-$25,000            0           0%
More than $25,000          1           0%

Total                    313         100%

16. The monthly cost of advertising your Web site is:

Less than $100           153          49%
$101-$500                 78          25%
$501-$1,000               34          11%
$1,000-$2,500             22           7%
$2,500-$5,000              7           2%
$5,000-$10,000            10           3%
$10,000-$25,000            3           1%
$25,000-$100,000           1           0%
$100,000-$250,000          2           1%
$250,000-$500,000          0           0%
$500,000-$1 million        0           0%
More than $1 million       0           0%

Total                    310         100%

17. On average, your cost per closed loan for Internet-generated loans
is:

Less than $100            97          32%
$100-$200                 61          20%
$201-$300                 51          17%
$301-$400                 30          10%
$401-$500                 20           7%
$501-$750                 18           6%
$751-$1,000               13           4%
More than $1,000          17           6%

18. Do you purchase leads from aggregators like Lending Tree or LoanApp?

Yes                       88          27%
No                       239          73%

SOURCE: MYERS INTERNET INC.

Figure 2  Myers Internet Inc./Mortgage Banking 2003 Consumer Survey

                      Number of    Response Ratio
                      Responses

1. I have been using the Internet World Wide Web for:

One year                  46         9%

Two years                 38         8%

Three years               57        12%

Four years                48        10%

Five years                46         9%

More than five years     254        52%

Total                    489       100%

2. I access the Internet mainly at:

Home                     395        80%

Work                     176        36%

3. Do you currently own a home:

Yes                       280       80%

No                        201       42%

4. The annual income of my household is:

Less than $25,000          59       12%

$26,000-$40,000           146       30%

$41,000-$60,000           134       27%

$61,000-$80,000            69       14%

$81,000-$100,000           42        9%

More than $100,000         38        8%

Total                     488      100%

5. Have you ever used the Internet to make a purchase?

Yes                       403       83%

No                         84       17%

Total                     487      100%

6. How many times have you been through the mortgage home loan process?

None                      131       27%

One                       123       25%

Two                       105       21%

Three                      65       13%

Four                       22        4%

Five or more               47       10%

Total                     493      100%

7. My credit is:

Excellent                  99       20%

Good                       90       18%

Fair                      154       31%

Poor                      151       31%

8. The best way to find a mortgage company on the Internet is:

Using a search engine     244       50%

Through word of mouth      51       10%

Just browsing              97       20%

Finding a site that       138       28%
lists mortgage companies

Other                      25        5%

9. I am using the Internet to:

Check rates only           90       18%

Obtain a mortgage         325       60%

For research purposes     131       27%

Other                      59       12%

10. Have you applied for a mortgage online?

Yes                       290       60%

No                        194       40%

Total                     484      100%

11. Will you complete an application online?

Yes                       177       36%

Yes, but only if it is    280       57%
secure

No                         32        7%

Total                     489      100%

12. How important is it to work with a local mortgage company?

Very important             132      27%

Not important              153      31%

Neutral                    207      42%

Total                      492     100%

13. If you found that rates were 0.125 percent better from a company
that was 2,000 miles away compared with rates offered by a local
company, which company would you use?

Local company               61      12%

Company 2,000 miles away   263      54%

Undecided                  165      34%

Total                      489     100%

14. What is the most important factor in choosing a mortgage company?

Rates                      386      79%

Service                    237      48%

Brand name                  10       2%

Other                       42       9%

15. Which of the following sites do you like? A site that:

Lets you compare rates     282      58%
from different lenders

Takes your application     345      71%
and submits it to lenders
for bidding

Quotes rates from one       29       6%
lender only

Quotes rates from one       10       2%
broker only

16. Please answer the following questions:

                                   Yes                No

Are you currently looking           85%               15%
for a mortgage?             (416 respondents)  (75 respondents)

Do you expect to get a             77%                       23%
lower mortgage rate if      (376 respondents)  (113 respondents)
you shop on the Internet?

Once digital signatures            83%               17%
become available, will      (403 respondents)  (84 respondents)
you be willing to complete
the entire process online?

Is it essential to have            81%               19%
contact with an             (393 respondents)  (91 respondents)
experienced mortgage
professional during the
loan process?

17. Please rate the importance of the following features on a mortgage
Web site:

                               Very important           Important

Accurate, up-to-date rates  87% (427 respondents)  13% (62 respondents)
Mortgage calculators        55% (269 respondents)  39% (188 respondents)
Informative content         75% (362 respondents)  24% (116 respondents)
Loan status                 85% (413 respondents)  14% (68 respondents)
Online application          66% (318 respondents)  30% (143 respondents)
Online chat                 25% (120 respondents)  31% (150 respondents)
Contact forms               58% (275 respondents)  37% (179 respondents)
Privacy policy              87% (413 respondents)  11% (50 respondents)

                               Not Important

Accurate, up-to-date rates   1% (4 respondents)
Mortgage calculators         6% (29 respondents)
Informative content          1% (6 respondents)
Loan status                  1% (3 respondents)
Online application           4% (21 respondents)
Online chat                 44% (212 respondents)
Contact forms                5% (24 respondents)
Privacy policy               3% (13 respondents)

SOURCE: MYERS INTERNET INC.

Warren H. Myer is chief executive officer of Myers Internet Inc., San Jose, California. Myers Internet is a leading provider of Web site development, hosting, Internet marketing and lead generation. Myers Internet Inc.s Web site can be found at www.myers.com.