The need to offer ever
better, ever faster, ever cheaper service on the Web
means to some people that doing business on the Web -
especially with complicated financial services
transactions - will soon drive out all but the few
players in every category that have the fattest war
chests. Others say the Web promise of a level playing
field can be kept for the small nimble player.
Though the initial cost of putting up a website is
Creps and other marketing trainers are starting to
emphasize that the price of doing business on the Web is
going up. As mortgage websites move beyond the earlier
interactive phase toward greater transactional
sophistication and ever faster turnaround time, it takes
careful budgeting to make sure these websites can remain
profitable on a per-loan basis while still offering the
consumer a compelling deal.
A company stepping forward to help them do just that
is ARC Systems of
Austin, Texas. ARC, founded in 1984, released a product
in June of this year that offers Web consumers
lightening-fast service without bankrupting the mortgage
websites that deploy it. That product is ARC's LT2k
Internet-based automated underwriting system, which takes
just 30 seconds to give the Web consumer a credit
decision. Using that feature, a mortgage website can
present consumers a rapid online decision one way or
another on a home improvement or debt consolidation loan,
without making them wait for email or other later
notification. None of the company's competitors can match
that feat right now, says ARC president and CEO Ed Jones.
LT2k is priced on a transaction basis: $15 per denied
application, $35 per approved application. It costs
$5,000 for an underwriting matrix to be programmed into
websites today offer borrowers the ability to submit
a full or partial application, said Jones, but few let
borrowers get an answer at the time of inquiry, a
generally acknowledged requirement for success with
marketing on the Web, where consumers are used to buying
books, airline tickets and other products with the click
of a mouse.
LT2k uses a pop-up box to give borrowers a conditional
credit decision right before their eyes. For any loan
that involves debt consolidation questions, a significant
LT2k feature is a module that calculates repayment
options to automatically recommend the best combination
of debts to be paid while optimizing the loan amount and
the amount available for cash out.
Volume is no problem with LT2k, says Jones; the ARC
system can make 5000 decision per hour matched against
the lenders? criteria, "not only against a single
lender, but multiple lenders and multiple products."
LT2k accommodates fluctuating daily interest rates as
well as both wholesale and retail originations.
Five new mortgage websites are being launched every
day, said Jones, and ARC expects to offer them a level of
functionality they can?t achieve on their own: "For
the small lender what we can do is level the playing
field. We quite frankly hope to be the engine under the
hood for a variety of Internet operations."