OpenClose.com, whose former parent Mortgage.com has fallen on hard times, says it sees a much better fate for itself and that wireless technology will take it there.
The Sunrise, Fla., company is preparing a pilot test for a wireless Internet mortgage system that is aimed at traditional brokers but will ultimately create efficiencies for them, lenders, and consumers, it says.
"It will make this whole process so much more convenient and so much faster," said Cindy Shomo-Gatto, senior vice president of strategic alliances at OpenClose.com. "It starts to take a very fragmented industry and brings it together under one platform."
OpenClose's partner in the effort, which could begin as soon as next month, is hyperNOC of Reston, Va.
Elizabeth Nichols, chief technology officer at hyperNOC, said the key to encouraging mortgage brokers to adopt the Internet is to keep it simple by emphasizing devices they use the most - cell phones and Palm Pilots, for example - and holding the transmitted information to a minimum.
"You've got a lot of people out floating around who need to be in contact with each other in order to get time-sensitive transactions done," Ms. Nichols said. "That's what wireless does - it allows these steps to get done more efficiently - and efficiency leads to savings of time and money."
OpenClose.com operates an online marketplace for brokers and lenders, says brokers using the system it is developing with hyperNOC will be able to order and receive credit information; submit loans to automated underwriting engines; choose a lender; select, lock, and submit a rate to a lender; and receive confirmation of acceptance.
Nick Karris, an analyst at Gomez Advisors, supports the effort, saying that when consumers are looking for a house, they need to know how much they can afford and what kind of loan they can qualify for. And in a hot market, he said, consumers need that information quickly - because homes today can be sold in a matter of hours.
"To have wireless access to instant pre-approvals is a very valuable service," he said. "I like the business model because the majority of consumers who buy a home--more than 70%--rely on an agent or a broker to facilitate the transaction."
Though Mr. Karris said he expects the mortgage brokers' dominance to wane in the coming years,. Real estate agents, he said, will remain an irreplaceable part of the home-buying process, and could also adopt a wireless loan system.
Though OpenClose.com officials said they believe they are the first movers in the wireless mortgage space, that in itself is not necessarily an advantage. A case in point is Mortgage.com, which was a pioneer in direct-to-consumer lending. Last week Mortgage.com announced it was laying off 80% of its employees and that it would wind down its business.
Barbara Rambo, president and chief executive officer of OpenClose.com, said the company has been a separate entity since the beginning of the year, when Dominion Ventures, Technology Crossover Ventures, and Canaan Partners poured $30 million into its coffers.
"What the events of last week really did is accelerate that course of independence," Ms. Rambo said.
