Fannie Mae’s 2000 National Housing Survey may not be good news for those few remaining Luddites of the world who wish the Internet would simply go away. But for those of us in housing finance who want to expand homeownership, make the mortgage origination process easier and more economical, and increase opportunities for lenders and consumers of all types, there is much to celebrate.

This year’s findings signal the arrival of more technologically savvy consumers, who, like past respondents to our survey — an annual sounding of consumer attitudes about housing and homeownership — harbor an intense desire to own their homes.

That is wonderful news indeed, because as these potential homebuyers increasingly turn to the Internet as a source of information and are willing to use the Web to apply for and close on a home loan, our industry can help take our country’s homeownership rate to new heights and provide today’s mortgage consumers the products and services they expect and demand.

Our survey, fielded in late July by pollsters Peter Hart and Robert Teeter, reaffirms what we’ve long known: Homeownership remains a core goal among those who haven’t yet achieved it. By focusing this year on the Internet and its impact on the mortgage business, we were able to gauge attitudes about both a timeless desire and the latest technological advancement that has dramatically transformed how Americans live and work.

There has been a perceptible shift in how people view the Internet and their willingness to use it to find and purchase a home. Today over 70% of adults surveyed have access to the Internet at home or work, up from just 36% in our 1996 survey.

And they’re not just bidding on stuffed animals, listening to MP3s, or buying paperbacks. They’re surfing for homes.

Fifty-six percent of recent homebuyers say they used the Internet at some point during their search for a home or a mortgage to finance it.

Far fewer, however, used the Internet to price a home loan — just 21%. And fewer still are ready to actually apply for a mortgage online. Only 4% of recent homebuyers were willing to take that step. And a mere 2% went through the entire process in cyberspace.

Why did such a small percentage of homebuyers have the courage to click their way to mortgage? It’s largely a matter of security. Only 29% believe that the Internet is a secure place to conduct one’s personal finances. That’s an issue that must be addressed by the entire e-commerce industry, not just housing financiers.

Yet despite reservations about online security, the percentage of Americans who say they would at least consider the Internet to apply for a mortgage is on the rise.

In our 1996 survey, half of our respondents reported that they would “probably not” or “definitely not” use the Internet to buy a home. Today the naysayers are fewer — 39%. And importantly, growing percentages say they would definitely or probably try to use the Internet the next time they’re seeking a home loan.

The comfort levels are on the rise because the benefits are increasingly apparent to today’s consumers. Over 75% believe the Internet makes it easier to compare rates, options and fees. Sixty percent feel that technology helps reduce racial discrimination in mortgage lending.

A clear majority say that the Internet makes the application process easier and faster, and 40% think that online mortgage lending will reduce costs for consumers. Given these attitudes and perceptions, we shouldn’t be surprised to learn that a majority of Americans believe that five years from now most mortgages will be made over the Internet. And that view is held by two-thirds of the nation’s 18- to 24-year-olds.

The 2000 Fannie Mae National Housing Survey also asked potential homebuyers whom they would more likely turn to online — a traditional bank or mortgage company with a Web site, or an Internet brand name that is expanding into the mortgage field.

Over 80% say they would prefer a trusted financial institution over a new entrant that cut its teeth in other realms of e-commerce. That portends great opportunities for mortgage lenders of all sizes and types that are determined to lead the way in Web-based mortgage finance.

Are we ready for the online future before us?

Mr. Raines is chairman and chief executive officer of Fannie Mae.

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