Yet another tech outfit is claiming it has the antidote to Web-loan-phobia.

Mindbox, of Greenbrae, Calif., says its Art-Enterprise software can help overcome that skittishness with “relationship optimization.”

Richard S. Barfus, president and chief executive officer of Mindbox, said that means that once borrowers apply for a loan, the system automatically offers them several other options, such as loans with higher amounts or lower rates, or products that would pay off other debts and wrap the amount in the loan they requested.

“It offers more to the borrower and implements the selling strategy of the company,” Mr. Barfus said. Selling flexibility and the ability to get an answer through the Web over several sessions are crucial, he said.

Art-Enterprise also offers subprime borrowers instant approval through Upland Mortgage, a subsidiary of American Business Financial Services Inc. of Bala Cynwyd, Pa.

Mindbox, whose clients include HomeSide Lending, Countrywide Credit Industries, GE Capital Corp., Chase Manhattan Corp., and Citigroup Inc., was spun off from Brightware Inc. of Novato, Calif., in April.

Art-Enterprise has had several incarnations at Brightware, but Mindbox now owns the rights to fine-tune and sell the software. Mindbox plans to introduce other components and improvements in the next two months.

Security continues to be a major barrier to consumer adoption of online mortgages, but service is the main problem, said Mr. Barfus, who helped Fannie Mae develop its Desktop Underwriter system while he was with Brightware.

“You should have the same level of service as though you were talking to a combination of the best broker and underwriter at your disposal,” he said. “It’s not happening today, and that’s why so few loans are being closed online. Mindbox provides those tools to our customers.”

The mortgage business is filled with technology vendors that claim to be revolution- izing online borrowing. From direct-to-consumer lenders to appraisal and title companies to back-end processing systems, start-ups and established companies have thrown their hat in the ring.

James P. Punishill, an analyst with Forrester Research Inc., says consumers will not borrow through the Web in mass until it is much easier to do so.

“There is nothing different about getting a mortgage online from getting a mortgage offline,” he said recently. “Consumers can compare and contrast lenders more easily than before, but what’s different about the process? Nothing.”

Mr. Barfus cited a Fannie Mae survey released Oct. 4 as evidence that large numbers of borrowers are researching and shopping for mortgages online, but are not applying or closing there. Fifty-one percent of the respondents said they believe that most mortgages will be originated over the Internet by 2005, but only 2% said they have used the Internet for the entire approval procedure.

Mr. Barfus says he is upbeat about the future of online mortgages but says lenders must use the medium for more than just taking applications.

“When we think originating loans over the Web, we think in terms of a mortgage company dealing with a consumer,” but the Internet also enables lenders to interact with brokers, correspondent banks, exchanges, and other lenders, he said.

“The architecture and collaborative nature of the Web, combined with the technology that we bring, provides great improvements to all of these channels."

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