Mortgage Time On The Web

Sen. Hillary Rodham Clinton addresses conference of the American Israel Public Action Committee in Washington May 24, 2005.
AP Photo
About half of Americans believe that most home mortgages will be handled over the Internet by 2005, and more consumers have become willing to consider applying for a home loan online, according to a survey by mortgage-market giant Fannie Mae.

Despite a continued lack of confidence in Internet security, 28 percent of those surveyed said they would definitely or probably use the Internet to apply for a mortgage, up from 20 percent four years ago, the survey being released Wednesday shows.

The survey indicated a "positive shift in people's view of the Internet and their willingness to use it to purchase a home," Franklin Raines, Fannie Mae's chairman and chief executive officer, said in a statement. "This is good news as the mortgage industry reinvents itself in the Internet age."

Many consumers still view the Internet mainly as a source of information on getting mortgages rather than a channel for applying for one, Fannie Mae noted.

The willingness to go online to get the best deal on a mortgage comes as Americans move more and more of their financial assets online. CBS MarketWatch reports a new Jupiter Research study shows total assets in U.S. online investment accounts for stocks, bonds and funds is expected to surpass $5 trillion by 2005, as a third of all households move holdings online.

The booming economy helped push the nation's home ownership rate to an all-time high of 67.1 percent in the first quarter of this year, surpassing the previous record of 67 percent set in the third quarter of 1999.

Fannie Mae notes that some obstacles to home ownership, such as the inability to save for a down payment and racial discrimination, have been diminishing.

Also in the survey, respondents identified six factors as very important in the homebuying process:

  • Knowing the true cost of the mortgage.
  • Being offered the lowest-cost mortgage possible.
  • Knowing that the lender cannot add additional "junk fees" to the transaction.
  • Laws that require lenders to offer the lowest-cost mortgage possible.
  • Having the right to refinance a mortgage at any time without paying penalties for it.
  • Being told all the factors that went into the lender's decision when it evaluated creditworthiness.
Fannie Mae's nationwide survey covered 590 adults who recently bought a home and 450 renters. They were interviewed between July 5 and July 11. The survey's margin of error is around 3 percent.

Fannie Mae, which describes itself as the world's biggest financial services company that is not a bank, is a government-chartered corporation whose stock is publicly traded. Congress created the company to buy home loans from banks and other lenders to supply cash to the mortgage market.

CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report