If there's a REALTOR® anywhere in the country who suggests home buyers go to a mortgage website for financing, that's news to me. The kindest thing I've ever heard any REALTOR® say is that refinancing a mortgage on the Internet can be a good deal for borrowers who know the ropes. Nevertheless, some mortgage industry veterans are beginning to project that online mortgage lending probably has a very bright future, even after the refi boom tails off.

Speaking on a panel at December's RealConnect 98 conference in San Francisco, Cameron King, Countrywide's chief technology officer, said Internet originations could top $300 billion a year within the next six years. He estimated total 1998 Internet originations at a figure somewhere between $5.8 billion and $8.4 billion.

Using widely publicized projections by the Killen & Associates, the Tower Group and others, and matching them with Countrywide's own internal data, Mr. King estimated that Internet mortgage loans could reach $30 billion a month by the year 2004, assuming total annual mortgage originations of $1.2 trillion.

For mortgage websites to reach those lofty tallies, the interest-rate environment must remain favorable and the mortgage product offered on the Internet has to change to a more streamlined loan that requires little documentation and takes advantage of such advances as automated property valuation in place of a full appraisal. "If the consumer still has to produce a letter documenting income or produce a bunch of tax returns," said Mr. King, "it's easier to just go into a branch office and do it the old-fashioned way."

Ironically, he said, a factor that could slow down the growth of online mortgage lending could be rapid technological change: "Technologists tend to jump right on board with the next bright development, but the consumer who has just bought a powerful new computer is not going to rebuy that computer again in five years. If the technology outpaces the mainstream population, I think online mortgage origination is going to have some problems."

Making sunny projections about the future of Internet originations is easy to do in today's environment because most loans done online are refinancings. When it comes to purchase loans, traditional lenders with a long history of working with Realtors to handle mortgage loan processing in a timely way have a big edge over their new Internet colleagues. "I know Countrywide is focused on the purchase transaction," said Mr. King, "but I'm not sure the online mortgage industry knows how to do purchase transactions."

Certainly we hear complaints about mortgage websites hiring inexperienced loan consultants and failing to meet purchase contract deadlines for delivering preapproval letters and written loan commitments. What we don't see is the tremendous rate at which online mortgage brokers such as E-Loan and HomeShark are identifying their deficiencies and cleaning them up. The advent of online tutorials by Intuit, Microsoft Fannie Mae and the others has already helped many consumers learn more about the mortgage loan process and their own borrowing options than they typically used to know. The day may be closer at hand than many think when Realtors will urge to buyers get tutored and preapproved on a handy mortgage website before going out to look at houses.