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Mortgage lenders have improved their online customers' experience over the last year, but many Web sites still fall far short of meeting their visitors' needs, according to a report released Tuesday by a financial services customer 
satisfaction research firm.
In a Web site study of 26 major online mortgage lenders, Change Sciences Group noted that 23 percent of the sites provided their online visitors looking to refinance a loan a "compelling" first impression, compared to 15 percent last year.
Only five of the 26 sites studied gave searchers for a standard mortgage a "friction free" first impression, the researchers reported, but that's still two more than last year.
Countering Bad Publicity
Given the downturn in the housing market and bad publicity over sub-prime loans, lenders could use a boost in their fortunes and a compelling Web site can help do that for them, argued Change Sciences Partner Steve Ellis.
"The mortgage lenders' Web sites can potentially play a very important role in helping mortgage lenders reconnect with consumers in a meaningful way," he told the E-Commerce Times.
He acknowledged that the challenges facing lenders are greater than those confronting other online merchants. "They're uniquely challenged because of the complexity of the product that's being sold at these sites," he observed.
Lead Generators
Although most lenders transact business at their sites, most deals are sealed offline, Ellis noted. "The majority of loans are not directly fulfilled through the sites," he noted. "The sites are mostly lead-generation tools for the companies."
A lot of indecision remains in the online lending market, he contended. "Some lenders haven't fully thought out their online strategy," he explained. "They haven't fully invested in the online channel. That's allowed the leaders in the channel to grab market share, and that's going to continue."
"There's a huge opportunity in the online space to have your site do significant work for you, but it's not something everyone is taking advantage of," he added.
Top Sites
Of the sites evaluated by Change Sciences, the top three performing sites were operated by Wells Fargo, Wachovia and E-Loan.
According to Wells Fargo, its online presence is part of an overall customer comfort strategy .
"Recognizing that buying a home can be an intimidating experience, we work hard at making the process simple and comfortable for customers," Wells Fargo Home Mortgage President Cara Heiden told the E-Commerce Times.
"Connecting with our customers through the channel that works best for them is our first priority," she continued. "We have a nationwide network of more than 10,000 home mortgage consultants, a phone option and an easy-to-use Internet site."
Balanced Approach
Respect for consumers and transparency are the keys to E-Loan's ranking by Changes Sciences, according to E-Loan's Chief Privacy Officer Tess Koleczek.
A notable challenge facing financial Web sites is how to dish out information to consumers.
"You look at a lot of Web sites, and they just bombard you with information, or they don't give you enough and you have to go digging for the information that you need," Koleczek told the E-Commerce Times.
"What we've tried to do is find a balance between too much and too little information," she continued.
Preapproval Neglected
A key consumer need that lender Web sites continue to neglect is online preapproval of mortgages, according to Change Sciences. It noted that only 15 percent of the sites are making the most of the process.
Frequently, just to see a house, a home buyer needs a letter of preapproval or prequalification, Ellis of Change Sciences explained.
"A lot of site visitors are coming to lenders' sites looking for those things," he said. "The best sites are the ones that are providing them online.
"It's a great lead generation tool for mortgage providers so it's surprising that more sites don't do it," he added.
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