HomeAdvisor is expanding its revenue base by creating licensing agreements with large banking institutions to power their online loan origination sites. The first company to license HomeAdvisor's mortgage platform is Chase Manhattan Mortgage, the nation's largest mortgage lender, according to a recent report.

The customized mortgage transaction platform, marketed to large lenders and brokers under Microsoft Real Estate Technologies, is planned to be the backbone of the Mortgages and Home Equity area of the Chase Personal Financial Services section found on http://www.chase.com.

Per their agreement, Microsoft will provide Chase with a customized version of its HomeAdvisor(tm) Loan Finder and Financing Tools, a unique platform two years in the making, according to Bryan Mistele, product unit manager for MSN.COM HomeAdvisor.

"The loan origination is extemely complicated," explains Mistele. "This helps level the playing field. Regional and local lenders can create a best of breed web presence using technology created by Microsoft."

The mortgage loan platform integrates loan product data with individual user (applicant) information. The loan engine then customizes the loan products based on the applicant's online interview. Real time product and pricing is tailored to the needs of the consumer based on credit history, the amount of the loan request and other factors.

Platform licensing is going to be a primary revenue generator for HomeAdvisor, who plans to announce other licensing agreements from large lenders within a month. The company has already recently announced its licensing agreement with Better Homes and Gardens, to power the real estate company's listing and loan centers.

While Chase Manhattan enjoys the benefits of having a new distribution vehicle, its loan products will also be fully integrated on the HomeAdvisor site.

The advantage to these large companies is that they can develop a stronger online brand by offering customized services which were developed at a lower coast with a faster time-to-market.

"We are a technology company and now we are licensing the technology we have built to help others build their web presence and to build great partnerships," says Mistele. "This will help them leapfrog over their competition."

It also raises the bar for the whole industry and just in the nick of time. HSH Associates, a nationally known financial publisher of mortgage information, believes that by year end of 1999, the mortgage industry will see a minimum of a three-fold increase and maximum of five-fold increase in online originations, totaling over $50 billion. According to Morgan Stanley, online loan originations should account for at least 10-20% of total originations in five years, resulting in $100 to $300 billion in volume with the potential for $1 to $2 billion in revenues. Forrester Research promises that by the year 2005, more than 30% of loans will be originated online.

Published: October 5, 1999

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