Loansurf, which was launched just after the high-tech bubble began bursting in 2001, has now passed the $110,000 million milestone of mortgage applications. Of those, less than 30% are actually drawn down.
"When people ring up (a mortgage broker), there’s a direct bond being formed straight away. On-line, there isn’t," Loansurf founder and executive director Dave Fermah explains.
When the website was first launched, the fledgling service was overwhelmed by applications but the settlement rate was very poor. After six months, Fermah took stock and used the experience to start re-building the system, streamlining and modifying the processes and focusing on ways to build more of a relationship with those who visit the site, he says.
He also worked on improving the service and feedback to customers as well as systems to weed out applications bound to fail.
"Initially, there were a lot of people who didn’t qualify in a lot of places. We put in fields so we were only sending out applications that a lender would want to see," Fermah says. But the site is also able to deal with those with credit hiccups, providing access to the sub-prime lending market.
The site still offers a tender system which aims to provide up to a dozen expressions of interest from lenders within 24 hours. This means the borrower"sees actual expressions of interest from the lenders rather than a filtered summary. Often borrowers only get one or two bank offers to choose from," he says.
Loansurf is backed by broking firm Mortgage People, formerly Property Pack, which owns 17%. Mortgage People managing director Carey Brunel says his firm sees it as a long-term investment in developing technology.
"Over the next five to seven years, as more people become computer-literate, if they’re going to access and service mortgages through the net, that will be the vehicle we use," Brunel says, openly acknowledging he isn’t among the computer literate.
It’s rather in the nature of an insurance policy for Mortgage People. While the level of inquiries is still modest, "it’s quietly gaining more and more attention."
