By Dolores Kong
The Boston Globe

Online mortgage companies promise convenience, lower
rates and fees, and faster approvals, but typically
they still require such old- fashioned things as paper
copies of W-2s and the borrower's signature to close
the deal. Getting a loan to buy a home may not yet be
a pure Internet transaction. But thousands of people
are starting applications online, and billions of
dollars worth of mortgages are originating there,
according to the latest quarterly survey by National
Mortgage News, an industry weekly.

"It's convenient," said Paul Muolo, executive editor
of the weekly. "But you've still got to schedule a

The online competition is fierce, with Internet sites
such as these, to name a few:

- www.countrywide.com
- www.eloan.com
- www.homeadvisor.msn.com
- www.mortgage.com
- www.nowlending.com
- www.quickenmortgage.com

Only an estimated 1 percent of the more than $1
trillion a year mortgage market originates online, but
some analysts project it could grow to 10 or 15
percent, even 25 percent, by 2003, Muolo said.

Online mortgage companies expect business to really
take off once legislation allowing "electronic
signatures" in Internet transactions becomes law. Both
houses of Congress have passed versions of such a
bill, but setting up a conference committee has proved
controversial, with sides being drawn over how to
protect the privacy of online customers.

The Web sites are already getting ready, though.

Sites try to distinguish themselves with various
features, such as rent-vs.-buy and mortgage
calculators. Some sites even promise a free PC or cash
back in exchange for applying there. Some are the
sites of direct lenders, while others are run by
mortgage brokers.

Some portal sites list a bunch of mortgage companies,
with rate comparisons.

Just as with a visit to a local bank, borrowers need
to look at the fine print and compare fees and other
differences, Muolo said.
One of the biggest pitches that Internet sites make is
the speed with which they approve applications, with
promises of an online OK within minutes or hours -
with little or no paperwork required.

Muolo said that doesn't make much of a difference in
most people's home-purchasing plans, but officials
from mortgage Web sites disagree.

For instance, nowlending.com, based in Wilmington and
a subsidiary of Webster Bank in Connecticut, is
running a print and radio advertising campaign that
plays off the tortoise and the hare fable to promote
what it calls a streamlined approval process.

In two to 24 hours, online applicants "find out if
they've been approved with conditions or they
haven't," said Sean Marsh, senior vice president of
marketing for nowlending.com, which reported to
National Mortgage News that it originated $42 million
in mortgages online in the third quarter of 1999. An
applicant approved with conditions is told what
supporting documents must be sent to close the loan.

E-Loan's senior vice president of technology
integration, Cameron King, said: "We guarantee the
actual approval within 24 hours." And if an applicant
has a W-2 form or pay stub ready to fax, "We can
provide that approval literally within an hour of
their being in the site."

E-Loan, which reported originating $330 million worth
of mortgages online in the third quarter of 1999,
features what King said is the only online tracking of
the status of an application.

A spokeswoman for Countrywide Home Loans, a direct
lender that has more than 550 offices nationwide, said
it, too, will soon announce streamlined approvals.
Applicants with the best credit could be approved in
minutes by just answering three questions and allowing
a credit check.

Countrywide reported originating $1.2 billion worth of
mortgages online in the third quarter of 1999,
according to National Mortgage News, but E-Loan's King
disputed that figure, saying his company's method of
keeping track is more accurate.

The Countrywide spokeswoman, who did not want to be
named, said that her company tracks the numbers the
same way E-Loan does.

"The trouble with online lending is it's hard getting
data," Muolo said.