Despite tough times in real estate finance, the most savvy lenders are spending heavily on their Web sites, according to a new study. But plenty of mortgage sites could use some big improvements.
While reaching loan prospects online should be at the center of the mortgage industry's strategy to rebuild their image, the degree to which lenders are ready to do this varies dramatically, according to new research issued today by Change Sciences Group.
For its research report, Winning Mortgage Customers Online: Customer Experience Benchmarks and Best Practices, Change Sciences looked at what people experienced over the last month as they attempted to complete key activities on 26 national and regional financial sites. The group evaluated sites on first impressions presented to key customer groups, helping people learn the basics of homebuying, and helping borrowers choose the right loan, apply for a loan online and find a loan officer, among other things.
"The savviest lenders are investing heavily in their sites despite the housing downturn and the subprime problems," said Steve Ellis, a Change Sciences partner, in an announcement. "They know their site gives them the ability to reach a person on his or her own terms, which is so important right now."
A Web site "puts people in the drivers seat," Ellis told MortgageDaily.com. "Consumers are looking for mortgage companies to give them more information out loan offers, who the lender is, and what they can do to help them learn more about the loan process. The consumer is looking for a relationship and lenders have an opportunity to reach them through their sites."
Overall, mortgage sites have generally been improving and are evolving, but there are still opportunities to drive business, Ellis said.
At least seven lenders can make it easier to navigate to the mortgage area of their sites, Change Sciences reported.
Lender sites left room to improve on reflecting the needs and ease the process of getting started for first time visitors. Only five of the 26 sites reviewed provide a completely friction-free first impression to mortgage seekers and six provide a meaningful first impression to those seeking to refinance, according to the research. Both of these numbers improved from the last review in the second quarter 2006.
Research also showed that some sites did not provide information about loan offers or provided information that was hard to digest. More than half of lenders did not provide detailed information about their offers on their sites, and of those who did, only two did without usability or content problems, Change Sciences said. Forty-six percent of sites present users with a way to determine which mortgage will work best for them, 73 percent provide a way for users to determine how much home they can afford, while 12 percent of the sites did not attempt to help people determine if refinancing will help them.
While most sites -- 92 percent -- attempted to provide information that helped educate prospective borrowers about the complexities of the homebuying process, most of them left key questions unanswered and can greatly improve the way they present such information, the research showed.
Less than a fifth of the sites are actively addressing the concerns of credit challenged, and of these, only three answer all common questions such prospects have, according to the report.
More than 80 percent of lender sites allowed people to apply online. Those who applied, however, often found a burdensome set of HTML forms. The research additionally found that the longest online mortgage application is more than three times longer than the shortest.
The percentage of sites that help prospects connect with a loan officer dropped 6 percent from the last review to 58 percent, but the share of sites that did this in a way that instills confidence and is friction free improved 9 percent to 53 percent.
A mortgage is "probably the biggest financial transaction most consumers are ever going to make," Ellis told MortgageDaily.com. "The more a site can do to help a consumer become an expert, the more likely they will pick up the phone."
Second and third places were again taken by Wachovia and E-LOAN, respectively, the report showed. Wachovia made changes to its mortgage landing page, homebuying basics information and application, while E-LOAN made changes to its home page and application.
Countrywide, which made changes to its home page and refinancing calculator, moved up one spot from its previous ranking to No. 4, and knocked GMAC Mortgage down to No. 5. Chase, First Horizon and ABN AMRO Mortgage respectively took sixth through eighth place and new to the top 10 were Regions and National City Mortgage.
HSBC was one spot shy of making the top 10, but changes to its home page and homebuying basics may have contributed to it's ranking being the most improved -- up six spots from the previous ranking -- out of all sites evaluated. Meanwhile, E-Trade's ranking dropped by the most -- eight places to No. 14 this year -- even though it made changes to its whole site, except the application, according to the report.
But it was Wells Fargo's mortgage site that remained king amongst the 26 lenders. The San Francisco-based banker has stayed in the top position almost since Change Sciences began researching mortgage sites, even though the research group has evaluated new goals and made data more precise throughout the years, Ellis noted. Since last year's ranking, Wells made changes to its home page and mortgage landing page, according to the report.