Click here for Part I of this interview

With the redesign of Countrywide's home page, a new channel was opened for the consumer. The loan application process was streamlined and available for consumers to access 24 hours a day. In addition, educational material was added to get consumers familiar with basic loan products and strategies.

The company now offers a wide range of products and information, including quotes on home owners' insurance and annuities, refinancing, home equity lines of credit, wholesale lending, and customer services. Other services are planned along with branching out with other strategic alliances, including Microsoft's much anticipated HomeAdvisor page.

The interview with Cameron King continues.

B.E.: What kind of volume are you doing now versus conventional methods?
C.K.: The percentage is small -- we fund an average of $20 to $30 million in Internet commerce. Last month we did $35 million, compared to $6.9 billion done by the company as a whole. We did 530 online loans in March [1998]. That compares to about 40,000 loans a month companywide. It may seem like a minuscule amount, but the medium is still in its infancy. We are growing at a rate of 20 percent per month, and right now that growth is limited by having the right number of loan professionals. We get an incremental lift every time there is a loan professional available to answer e-mail.

B.E.: How close are we to online closings?
C.K.: A home mortgage is so complex that consumers can be their own loan representatives, but it still requires the verification of employment, credit, and you have to verify identity. We still have to get signatures, and customers have to walk into branch offices to get that done. Nobody can do online approval and closings yet. There are still so many intermediaries that have to present at the closing of a loan. An escrow officer, attorneys, and title companies all have to be present to sign the final document.

B.E.: Were mortgage and refinancing options both available early on?
C.K.: No. We only provided a purchase channel, then we added the home equity wizard in June of 1997 and the refinance wizard in July 1997.

B.E.: What are some points of difference between Countrywide and other companies?
C.K.: The biggest difference is that we don't have loan reps. There is a huge advantage to this for the Internet (that loans can be offered at wholesale prices and direct from the lender). When we do a loan on the Internet, I forward the loan to the Countrywide branch closest to the consumer.

The second difference is most lenders are centralized, and nine times out of 10, a problem always comes up on the closing documents. The lenders then have to send the documents back to the central body, get the corrections made, and then FedEx them back again. Meanwhile, about 72 hours go by. You are waiting, and your moving van is waiting. That is the single biggest problem. With a Countrywide branch, if there is a problem, the documents are redrawn on the spot.

B.E.: What else does the site do besides provide a consumer direct channel for mortgage origination?
C.K.: Consumers can view customer service information, find the right time to refinance, and on top of that, we have three types of information on the home page for the home builder, the Realtor, and then for the mortgage broker. We have all of our business partners, and we have services and content to cater to their unique needs. We are the only lender who provides that level of service.

B.E.: When did you first push to have your loans on competitive sites like Quicken and Microsoft? Did you have a battle on your hands?
C.K.: I sold that idea! I thought it would be a huge problem. I looked at it as being a natural extension of the existing channels of business. We have a retail channel and wholesale channel. On the Internet the consumers come, and they can get a wholesale price. That is where Quicken and Microsoft come in -- they are an extension of the wholesale site. So they were comfortable.

B.E.: How are mortgage brokers responding to your online channels? Are they being cut out of the loop?
C.K.: I think the mortgage brokers are concerned with it because we were showing prices. It made the issue of price more transparent to the consumer. Now they are more comfortable because they have a vehicle to compete with the direct lender sites. Quicken is a good thing. They have opened up to the use of the Internet in a mortgage broker environment. I think traditional brokers are starting to feel concern, but they need to get into some form of aggregators.

B.E.: How involved are you in Microsoft HomeAdvisor?
C.K.: I participate on the board of directors, so we are very excited about it. It will be a great source of business.

Click here for Part I of this interview

Published: April 9, 1998

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