A national broker of discount residential mortgages has teamed up with Compuserve Inc. to develop an on-line loan origination service.

The service, called Mortgages Made Simple On-Line, will be offered through American Finance and Investment Inc. and will let consumers conduct virtually all aspects of residential mortgage finance from their personal computers.

AFI officials said that the company will offer other financial products on-line, such as credit cards, home equity loans, and auto loans, if there's enough demand from customers.

Separately, AFI said it would sell all outstanding shares to WSFS Financial Corp., the parent company of Wilmington Savings Fund Society.

Marvin N. Schoenhals, chairman, president, and chief executive officer of WSFS, said in a press release that the acquisition is in keeping with its strategy of being a low-cost provider of consumer mortgages by marketing products through alternative delivery systems.

The acquisition, to be completed within 90 days, "will increase fee income without adding significant assets or the capital needed to support them," he said.

AFI's loan origination service will operate as an independent on-line service using the Compuserve network as a conduit for transactions with customers.

The service does not require AFI customers to maintain an account with Compuserve.

The service consists of Windows-based software that enables users to conduct research and perform financial analysis, submit applications, communicate with loan representatives, check daily interest rate movement, and lock in rates and points.

The software, developed with Compuserve's network services division, based in Columbus, Ohio, is scheduled for general release in October.

AFI president Jack Rodgers said the on-line service will play an integral role in AFI's growth.

The Fairfax, Va.-based lender - which processes 20 million to 25 million new mortgage applications a month - is building its business by providing consumers with lower rates and streamlining the documentation and approval process.

Technology creates advantages, because the efficiencies from sending data electronically can drive rates down, said Mr. Rodgers.

He added that the service will also improve the borrowing process by providing customers with the means to conduct research in a structured, unbiased way. Currently, consumers rely heavily on sales representatives whose information may be tainted by their profit motives.

"This gives consumers control of the transaction," he said.

AFI will market the service to about 400 customers. Mr. Rodgers said AFI may also take advantage of opportunities to present the program to WSFS customers.

The only cost to consumers will be for the software. Prices may vary according to the method of distribution.

For example, the software will be available free from AFI via mail and through the company's Internet site, which will be on-line in October.

The software on the Internet will include all functions except the ability to connect to AFI. The AFI connection cannot come on-line because the information is not yet able to be secured on the Internet.

Customers will, however, be able to download the program and connect to AFI through the private, secured on-line service.

AFI may also market the software through infomercials at $9.95, and may sell a value-added version through software stores, said Mr. Rodgers.

He added that AFI does not consider the software a revenue item, but only wants to get it into consumers' hands through as many channels as possible.

"We intend to make money by making loans and making the process simpler for consumers," he said.

Before developing the service, AFI researched a number of other on-line providers and technology companies, but decided on Compuserve because of its quick response, expertise, and global network, Mr. Rodgers said.

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