Enabling people to apply on-line for mortgages was no easy sell to upper management at Money Store Inc., a top executive says.

K. Shelly Porges, executive vice president of business initiatives, said her bosses were not convinced that people with tarnished credit-Money Store's primary customer base-would troll the Internet for mortgages.

"It was kind of like, 'Don't tell the CEO we're doing this,'" she said last week at a Financial Women's Association luncheon here. "We first did this as a backdoor, shoestring operation. It was not an approved strategy."

The naysayers were quickly proved wrong, Ms. Porges said. "For what we are spending, we are getting an incredible return," she said. Ms. Porges, a former banker and marketing consultant well known in credit card circles, made her comments as she wraps up a year-and-a-half stint at Money Store. She is one of more than 700 Money Store employees, or 10% of the staff, being laid off as part of a cost-cutting program at its parent, First Union Corp.

First Union, which acquired Money Store in June 1998, announced this month that it would cut 5,850 employees. May 4 will be Ms. Porges' last day with the lender.

Money Store does not originate loans on-line, though it plans to do so very soon, Ms. Porges said. Rather, it prompts consumers for information about a potential home purchase or refinancing. A lender then calls the consumer to follow up on the application and try to close the deal.

The on-line mortgage application program has generated $100 million of new business since it started a year ago, Ms. Porges said. Though that represents less than 4% of Money Store's overall loan volume, it "has been growing very fast," she said.

Acquiring mortgages on-line will become increasingly popular to subprime customers, said Kenneth Posner, an analyst at Morgan Stanley Dean Witter in New York.

Consumers with less-than-stellar credit "like to see what they qualify for, rather than be embarrassed by having to explain the mistakes they've made to a loan officer," Mr. Posner said.

Ms. Porges predicted that by 2001, more than 60% of all loans originated using the Internet will be mortgages. Today, that number is 30%. Taking applications over the Internet makes lending far cheaper than conducting the whole process in branches, Ms. Porges added. "With our Web site applications at Money Store, we can originate a loan for less than a quarter of our normal origination costs," Ms. Porges said.

Part of senior management's skepticism of conducting business over the Internet simply may stem from inexperience, she said. Only 25% of chief executives at Fortune 500 companies have surfed the Internet, she said. "That means 75% have never been on the Net," Ms. Porges said. "That's phenomenal."

Ms. Porges said she has not yet secured a new job. But she has been talking with several large consulting firms. Additionally, she has spoken with a number of electronic commerce firms about chief executive positions.

"That's an area I'm very interested in," she said.

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