Consumers say the Internet is a great tool for comparing mortgages and home-equity loans offered by different lenders, but rate it as less effective than the telephone or in-person meetings for obtaining information tailored to their specific situation or needs.

Loan originators who want to get more consumers to fill out applications online should make their Web sites more user-friendly, offer customized advice online, and better integrate online and offline channels so consumers can switch to the phone or online chat when questions pop up.

Those are among the findings of a Deloitte Consulting LLP report, "The Silver Lining in Lending: Turning Doubters into Online Believers."

The report differentiates between online "believers" — those who think the Internet makes the loan application process faster and more convenient — and "doubters," who want more customized advice and find Web sites difficult to use.

Because lenders may be able to cut their origination costs by up to 80 percent when applications are filed online, the report offers advice on turning doubters into believers.

"While virtually all institutions are online, some are only dabbling and not making the commitment necessary to be effective," the report said. "For both the large lenders and mid-tier institutions, excellence in the online channel will be a key differentiator."

The report, based on an online survey of 604 consumers who took out home loans in 2006 and 2007, found that most used the Internet as a research tool to compare rates and products, regardless of how they ended up filing their loan application.

The survey included 300 consumers who applied for a mortgage or home-equity loan online, and 304 who applied by telephone or in person. Not only did 93 percent of those who applied online report conducting research online, but so did 71 percent of those who applied by telephone and 60 percent of those who applied in person.

Of those who applied online, 59 percent said they used a loan aggregator Web site to research offerings and solicit rate quotes. Of those who used an aggregator, 61 percent went to and 12 percent to

"Given the widespread use of the Internet to research mortgage and home-equity products, it appears that most lenders have failed to take full advantage of this channel to turn these prospects into applicants," the report said.

Although online applicants were more heavily represented in younger age groups, 44 percent of those who filled out applications online were 45 years or older.

Rather than targeting younger or wealthier consumers, loan originators who want to boost online applications should work on improving their Web sites, offer customized product recommendations, and provide more interaction through Internet chat or "click-to-call" access to customer service representatives.

Deloitte analysts assessed the Web sites and online application process used by 12 lenders, including six large institutions, three mid-tier companies and three online specialists.

Problems encountered at most of the sites included difficulty accessing required information, the need to navigate multiple screens to complete an application, not providing a customer support number on the home page, and a lack of product research tools.

Consumers who filed applications in person or over the phone reported a higher level of satisfaction with information and recommendations provided about their specific situation or needs.

While 72 percent of consumers who applied in person and 68 percent of those applying by phone were "very satisfied" with the information they received about maximum loan mount, only 48 percent of online applicants said the same thing. Similarly, 67 percent of in-person applicants and 54 percent of phone applicants said they were very satisfied with the information they received on loan products that best suited their needs, compared with 43 percent of Internet applicants.

The report recommended that lenders integrate channels to allow consumers to start an application online, have any questions answered by phone, and then complete the application wherever they feel most comfortable — online, over the phone, or at a branch office.

Pulling that off requires tight integration of data across channels, so that when consumers switch channels they don’t have to provide the same information again, the report said.

Quicken Loans, for instance, collects basic information online before a representative calls the consumer to recommend the most appropriate product and collect the additional information needed to complete the remainder of the application, the report said.

While one leading bank said the company uses the Internet to drive consumers to branch offices, Deloitte consultants said they believe "it is too limiting to view the Internet only as a way to generate leads for other channels. Some consumers are already comfortable with applying online, and more will become comfortable over time as online applications become more common and the functionality of Web sites continues to improve."


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