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Chris Musto, Gómez Watchfire
Chris Musto, Gómez Watchfire
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Q2 2005 Mortgage Scorecard: Advancing Customer Convenience

The recent release of the Q2 2005 Mortgage Scorecard shows Countrywide moving to the top spot for Overall score while Bank of America and Wells Fargo tie for second.

The recent release of the Q2 2005 Mortgage Scorecard shows Countrywide moving to the top spot for Overall score while Bank of America and Wells Fargo tie for second. The Scorecard, which examines online support for consumer direct loan origination, reveals mortgage lenders adjusting to life after the refinancing boom by pushing online applications for home equity products. A few lenders are also advancing customer convenience by accelerating the application process by supporting same-day online decisioning and online rate locks. Lenders are also using their sites to support customer retention strategies, offering current customers online applications pre-filled with the customer's data to ease the new loan process. Across the industry, lenders are also taking steps to address privacy and security concerns, but the Scorecard reveals that lenders can improve how they communicate with customers about these issues.

Here are the findings by categories and the winners by category and task.

Scorecard findings by category

Functionality: With a wealth of resources for prospective borrowers, E-Loan wins the Functionality category. E-Loan is one of three Scorecard lenders, along with E*Trade and IndyMac, to offer visitors a comparison of its loan terms against those from competing lenders. E-Loan's site provides significant help throughout the application process, from allowing borrowers to print out pre-approval letters to listing the documents the lender is still expecting from the borrower. Further, providing applicants with FICO scores after the credit check is a highly useful feature that only E-Loan and Wells Fargo offer their customers.

Ease of Use: As the online resources mortgage lenders offer consumers increase, lenders are focused on making their sites easier to use. In addition to its overall win, Countrywide achieved the top spot in the Ease of Use category, with well-designed site elements that include a clear and simple request to check the applicant's credit, a digestible "How Much Can I Afford?" calculator and a helpful chart for comparing refinancing alternatives. Across the industry, mortgage lenders are committed to making their sites easier to use. Twelve out of the thirteen lenders now streamline the new loan application process for existing customers by pre-filling the application. Still, the Scorecard shows lenders can do more to educate borrowers about the application process, such as including alongside requests for personal information explanations of why that information is required.

Privacy & Security: Led by category winner Bank of America, mortgage lenders are taking concrete action to create trusted online environments. At 12 out of the 13 mortgage lenders, online forms only appear on "https" pages, while at 11 lenders, all pages from which an applicant can log into a saved application or even to check on the status of a loan in process only appear on "https" pages. While financial sites generally encrypt login credentials, encrypting the page on which the login fields appear is a best practice that educates customers to enter confidential information only when presented with secure sessions.

But when it comes to communicating with online users about privacy and security, most mortgage lenders could be doing more. As with other financial services providers, almost all Scorecard lenders offer links to both privacy and security policies at critical junctures, but only two, Bank of America and E-Loan, require applicants to explicitly acknowledge receipt of the privacy policy. Further, only five lenders clearly and explicitly instruct users on how to reach the lender in the event of identity theft.

Quality & Availability: The Quality & Availability category tracks the steps taken to make the site accessible to all visitors, that customer service is visible and accessible throughout the site and loan process, and reduces the uncertainty about the mortgage process. IndyMac wins the Quality & Availability category on the strength of its money-back mortgage guarantees and the extent the firm takes in making it easier for online visitors to reach customer service. In general, lenders have room to improve in this category. For instance, in automated testing of Scorecard lender homepages against the W3C's Priority 1 accessibility guidelines, Watchfire found 21 or more non-compliant items on six out of the 13 lender sites.

With this edition, the Mortgage Scorecard follows the enhanced Scorecard methodology, which is based on feedback from firms from across the Scorecards. Introduced late last year, Watchfire GómezPro created a more intuitive set of categories, rebuilt the Ease of Use category and ranked firms by task.We have also taken advantage of Watchfire's technical resources to replace the Customer Confidence category with more robust Privacy & Security and Quality & Availability categories. To arrive at a firm's score for each task, we look at the firm's results for the Functionality and Ease of Use criteria related to that task and add to that the firm's Privacy & Security and Quality & Availability scores. Winners by task

Get Rate and Select Loan: Countrywide

Apply for a Mortgage: ABN Amro's

Apply for a Home Loan or Line: Wells Fargo

Learn: Countrywide and E-Loan (tie)

The Q2 2005 Mortgage Scorecard shows lenders refining their online presence in reaction to the end of the recent refinancing boom and with an eye towards retaining and expanding current relationships. Email rate alerts, pre-filling of applications, online status trackers and online loan document delivery are becoming standard. The mortgage lending process, especially for purchases, is still a largely offline experience, and each Scorecard lender has slightly different strategies for consumer direct lending. But these same firms, among them some of the largest prime lenders, are paying increasing attention to the ability of the online channel to contribute throughout the loan application lifecycle.

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