About half of all intermediary lending is now conducted on the Web with online home loans from brokers accounting for almost a fifth (19%) of total UK gross mortgage lending, according to research by TowerGroup and London-based Frank Eve Consulting.
TowerGroup says requirements to comply with FSA regulations has encouraged intermediaries to use the Web to secure mortgages and will further stimulate online lending in 2004.
The study surveyed how UK mortgage lenders and intermediaries use Internet technology to speed up and automate lending process. The twelve study participants account for approximately 75% of all UK intermediary lending.
Frank Eve, managing director of Frank Eve Consulting, says real-time (60 seconds) agreement in principal (AIP) loan approval is a mission-critical best practice that separates the leading lenders from the laggards.
He adds that a key competitive differentiator is a lender's ability to pre-populate the online loan applications from mortgage sourcing systems and track loan case status via the net: "This functionality reduces intermediary and lender operating costs and completes the loan faster for the mortgage applicant.
"Without this technology, lenders would not have been able to effectively process the significantly larger gross lending volumes, which grew at a 35% annual rate the past two years."
According to the research, leading mortgage sites are often an extension of the lender sales force and the most sophisticated sites provide secure, customised
access levels for supervisors, advisors and administrators.
The study predicts that UK platforms Mortgage Brain and Trigold and US platform Ellie Mae will complement, but not replace, lenders' intermediary Web sites.
TowerGroup says UK intermediary site technology has advanced rapidly but still lacks loan document standardisation.