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Less than half the general adult online population has used the web when it comes to their home loans, according to new research from Gomez, the Internet research firm. And most of those were simply shopping for the best rates.

The study found that just 43 percent of consumers started their mortgage applications online, but half of them abandoned the process somewhere along the way.

The reasons would-be borrowers don't finish the process online are many. But for the most part, they don't have all the information needed to finish the process, are uncomfortable with providing confidential information online, found it took too long to fill out the application, or simply changed their minds.

The research found that mortgage brokers, the agents who work on behalf of consumers but don't actually fund the loans, take much greater advantage of the Internet than borrowers.

According to the study, 77 percent of the $113 billion in total online originations in this year's first quarter -- $87 billion -- came from this wholesale broker channel.

The study, which focused on brokers who worked with six major wholesale lenders, found that three out of four loan jockeys have used a lender's web site, largely to research program availability and rates, register or submit an application, access or download marketing materials, lock in a rate and check on the status of their loans.

The information gathering tasks still far outweigh transaction-oriented tasks, said senior analyst Matt Carrick. But more than half of all brokers have submitted a loan application and locked in a rate online, and 40 percent submit their loans online at least 61 percent of the time.

However, only 5% use only the Internet; the rest use standard procedures as well as the web.

One year from now, though, most brokers told Gomez researchers that the Internet will become their primary channel for handling all the major tasks, making the phone and fax all but obsolete. This, said Carrick, represents "a 30% jump across-the-board."

But researchers also found a great deal of dissatisfaction with the sites now available to them. In fact, only half said they were pleased with existing loan program and rate information.

"Feature satisfaction levels leave much to be desired," said the Gomez analyst. "Making information and functionality available is not enough to win over brokers unless it is presented effectively."

The study found that brokers want speed and reliability, and if they don't get it, they will go elsewhere to find it. More than one in four have stopped using a wholesale lender's site. And of those, only 22 percent came back.

Their most frequent gripes were that the site was too slow or difficult to use, approvals and feedback was inaccurate, service was poor and pricing was incorrect. In other cases, brokers complained that applications could not be run through the system more than once.

Carrick said it is still better for lenders to have a poor website than no site at all. Those with a lousy web presence will "lose a chunk of business," but to the extent that the Internet brings in business at a lower cost, it is still beneficial to have a site, even if it's not a good one.

What will it take for brokers to use the net? Gomez found they want faster turnaround, no per loan charges to submit an application, guaranteed rate locks, the ability to submit both conforming and nonconforming loans, and perhaps even volume discounts.

"As rates rise and the refi boom stalls, the wholesale channel will continue to dominate originations and speed and functionality will be crucial," Carrick said. "Base level functionality is no longer enough. If that's all you have, it's going to cost you business."

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