LEGAL By Jonathan Flaws
online
Nailing mortgages
Unthinkable way back when, Jonathan Flaws writes how mortgages online can be effective today.
W
hile cleaning out my bookshelves recently, I came across an old book from 1992 entitled Internet for Dummies. Back then, the internet was still in its infancy. It was not clear how it would develop and its future usefulness. Looking forward, the authors John R Levine, Carol Baroudi and Margaret Levine Young suggested the internet would be most useful for emails and instant communication. They didn’t see the internet taking off as a commercial medium to enhance trade or business. You would use it to talk to people but really to buy anything. Looking back, the authors could not have been more wrong. The internet has exploded as a means of connecting people for
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commerce (Amazon, eBay and Trade Me); for social interaction (Facebook and Instagram); for access to information (Google and Bing) and for connecting people for personal relationships through online dating websites. It has become invaluable in the mortgage business for communication with existing clients and for back office communication between brokers and lenders and lawyers. But it doesn’t seem as if it has been much use yet in selling mortgages. It can be useful for lead generation but it can’t seem to replace the human interaction required to sell a mortgage.
FORMING RELATIONSHIP A mortgage is often cited as one of the biggest financial commitments in which a person can enter. You could also describe forming a long-term personal relationship and finding
a partner as a large financial commitment, particularly if you have to unwind it after two or more years together. The dating industry has found a way to use the web to create and consummate successful relationships so why can’t the mortgage industry? The Credit Contracts and Consumer Finance Act 2003 assumes that lenders are likely to use the internet as a shop window. In the responsible lending section it requires lenders who have an internet site to display prominently the terms of any standard contracts as well as information regarding the costs of borrowing.
NET SHOPPING The CCCFA assumes that consumers will use the net to shop around for credit. Really? Will they
