Gregg Stebbins, a writer, was looking to refinance his $300,000 home loan.

He was set to do it with his original lender-until he came upon the E- Loan Web site.

"I remembered how nightmarish it was to look at every detail of a loan; there were things I didn't understand," said Mr. Stebbins, who lives in Carmel Valley Village, Calif.

"So I went to the Internet to get answers-because it was easier than talking to a lender.

"With the site, only I could make the mistake. If I didn't get the best rate, it was because I blew it."

Mr. Stebbins' experience illustrates why on-line mortgage brokerages are proliferating-as well as the limits of on-line service as an alternative to face-to-face transactions.

Mr. Stebbins, whose most recent book is "White House Confidential: The Weird Book of Presidential History," refinanced his loan on-line through Bank United in Texas.

The fee and rate were lower than his original lender had offered for a refi loan.

But Mr. Stebbins warns that on-line mortgages may not be the best idea for everyone.

"I didn't use this at the point when I was still learning about mortgages-you can ruin your life if you make the wrong choice about something like this," Mr. Stebbins said.

"So if you're being exposed to homebuying for the first time, you might want a mortgage broker to hold your hand and sit across the table and explain things to you."

Still, Mr. Stebbins said, "there is something to be said for filling out your application at 3 a.m. if that's the only time you have to dig your tax returns out of the garage."

E-Loan, of Palo Alto, Calif., leads the pack in this business, projecting $1 billion of loan referrals this year. And Monday it announced an alliance with the Internet insurance dealer InsWeb; each will make the other's products available on its site.

"We act as a traditional broker and banker by assisting the consumer to pick a lender, taking applications, pre-underwriting, processing the loan, and filing for credit reports-all done on-line," said Doug Galen, vice president of business development for E-Loan.

"The key point here is that we can offer the lowest markup from wholesale rates, versus a referral network which uses retail rates."

Mr. Galen said the company works with 60 lenders and operates its own bank as well.

"We are also a lender, which allows us to close loans quicker and create unique mortgage products," he said. "But our lender has to compete just like any other lender to win the business."

Home Shark Inc., San Francisco, is another on-line mortgage broker that claims to be faster, better, and cheaper than traditional brokers.

"We're getting the wholesale rates from our lenders that all brokers do, but we can pass on the lower cost-because inquiry is done on-line and our marginal cost is zero," said Doug Okun, director of product development for Home Shark.

"We offer 'virtual hand-holding' on the Web, and our customers are more committed to seeing the loan close because they've put in so much of the effort."

Home Shark takes on-line applications in behalf of 16 lenders, who get wide distribution without needing widespread offices.

The company means to keep the list relatively short, Mr. Okun said. "There's a point when you give people too many choices and they get confused and break down."

Home Shark charges a $400 processing fee if the loan is closed and 0.5% of the final loan amount.

Intuit's QuickenMortgage, based in Mountain View, Calif., is an Internet lender referral network that helps consumers shop for loans and apply and receive state disclosures.

For this service borrowers can expect to pay a $640 fee and 0.4% of the loan amount, with a $225 rebate.

"A lender gets so much more exposure with us out there," said Alison Berkley, group product manager for QuickenMortgage. "People can comparison- shop in one place with 17 lenders, which would take weeks in the real world."

In May, Finet of Walnut Creek, Calif., acquired San Ramon, Calif.-based, which deals on-line in conventional residential, government, and subprime loans.

"We're moving toward a system with paperless transaction but until that time we have to go through traditional lenders," said Christopher Parks, an spokesman. "I think over the next five years 50% to 60% of mortgages will originate on-line." expects to close about $100 million of loans by yearend.

Mr. Parks warns that excessive growth in the on-line origination market may hinder the industry in the long run.

"We don't originate everything in sight and splay our name all over the place, because what you can originate and what you can close is a different story," Mr. Parks said.

"You can really get yourself into trouble if you take on much more than you can handle-and people shouldn't have to sacrifice service for rates."

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