The Internet may be the "most important" tool for mortgage professionals

The Internet may simply be the “MOST IMPORTANT” tool for the mortgage professional today.

Think about it. What other form of media anywhere is totally interactive? When you place an advertisement on the radio, your borrower can only “hear it”. When you place an advertisement in the newspaper, they can only “read it”. When you place an ad on the television, they can only “see it”. When you advertise through the Internet, the environment is completely interactive. Your client can actually transact business with you! What a powerful concept.

Why does the Internet work so well for the mortgage industry? You will find the answer in two parts. First, most mortgage related forms are standardized throughout the nation. This makes a huge difference when it comes to technology. Basically it is easier to automate an industry that uses standardized forms and data formats, and in the near future this will be enhanced with the complete acceptance of the MISMO standards. It is much easer to exchange data within an industry that adopts standards. The second reason is that consumers are using the Internet to find homes, purchase merchandise and yes, even apply for a home mortgage loan or refinance.

Recently the Census Bureau of the Department of Commerce announced that the estimate of U.S. retail e-commerce sales for the second quarter of 2004, not adjusted for seasonal, holiday, or trading-day differences, was $15.7 billion, an increase of 23.1 percent from the second quarter of 2003 and this is only for one quarter! After analyzing the trends since 1999 we are finding that consumer purchases online are on the increase and are at the highest point since the Internets inception. How many of these shoppers would qualify for a mortgage loan?

So how does the Internet measure up for you as a mortgage professional? When does it make good financial sense to take a serious second look at what the Internet can do for you?

Lets think of your Internet use in terms of Return on Investment (ROI) If I could promise you that you would earn a rate of return of 120% on the stock market would it make sense to invest? Does that sound too good to be true? But if it were, would you consider it? Of course you would. But before you made your decision you would probably want to do some research to confirm and validate your choice. Perhaps you might do some comparisons with other investments, or you may simply roll the dice and give it a try.

I am not saying that you will earn a 120% return by using the Internet within your business but consider the idea… What if you could?

Here is a definition for ROI. A term describing the calculation of the financial return on a business policy or initiative that incurs some cost. ROI may be measured in terms of a payback period for the investment, or as a percentage return on a cash outlay, it may also included staff moral, productivity and loyalty, and may take into consideration cost savings as a result of the investment- there are many different ways to calculate it. Ok, based on this definition you must incur some cost but you need to measure your return over a period of time and you need to consider several other variables in your calculation.

Here are 10 items that you must factor into your ROI calculation when comparing the Internet to other marketing opportunities.

1. A transactional website enables you to be “open” 24-7. How much business do you miss when you are “closed for business?”
2. You can establish links from other websites in your community. How many visitors will visit your site from these links? And, how many sites are they linked to, who in-turn may lead prospects to your site?
3. You can purchase keyword site visits from Google and literally guarantee a certain number of visitors to your website. How many of these visitors can you convert to borrowers?
4. A transactional website can streamline your communication and approval process enabling you to cut costly alternatives. How much time will you save as a result of this?
5. A properly executed website strategy may enhance employee moral, company image and overall enthusiasm within the organization. How will this impact your employee work ethic?
6. A website enables you to compete with larger lenders marketing online in your community. How many loans are captured by these competitors as a result of you not being there to provide alternatives?
7. You can link your website to real estate agents, insurance agents and other affinity groups creating a value added service and a team approach that wins you new business both online and offline. How many more loans will you do annually as a result of this cooperative approach?
8. Consider any increase in productivity as a result of integration of your web address into any existing advertising, signage, and direct mail marketing campaigns. How many more people will visit if they see a web address?
9. Consider the cost of starting over. If you work for a company that markets online and you do not have an independent origination presence, you lose access to the links, leads and other web oriented resources if you leave. How much will it cost to reestablish these relationships?
10. What is the overall financial benefit you will realize years from now by working smarter rather than harder? How important is leverage to your overall business strategy? Consider the overall benefits of automation over manual.

Even after 11 years of dealing in the high tech world of Internet based loan origination, working with software programmers, designers, database architects, and enthusiastic industry visionaries I have learned one thing. Keep it simple and stick to the basics.

Remember, there is a reason why they call the Internet the “Super Highway” and as with any highway, if you do not have a roadmap to where you are going, you may never get there and worst of all you may spend countless hours and dollars trying only to be disappointed by the results. Well talk more about that in a later article, but for now, think about what the Internet means to you and consider how it can make a positive impact on your business, then take some time, conduct some research and confirm and validate your decision. It may be the best investment you will ever make!

You may contact David with questions or comments at:

dwerner@vlender.com
http://www.vlender.com