Lots of books, CDs, and clothing have been sold over the Internet, but home mortgages have been slow to follow.

Forecasts put Internet lending at $18.7 billion this year, $32.2 billion next year, and $91.2 billion by 2003 nearly 10% of the market. But many bankers say they are leery of on-line originations.

Most on-line lenders report that they close 10% or fewer of on-line applications, and that most Web-site hits are just attempts to check rates. Moreover, building a brand on-line can be terrifically expensive.

On Wall Street, some electronic lenders are thought of as pure Internet stocks. E-Loan Inc. of Dublin, Calif., had a spectacular public offering in late June, rising to $63 a share after opening at $14 on its first day of trading.

But a few weeks later Mortgage.com of Plantation, Fla., raised only about half -- $56.5 million -- of the $112 million it had expected.

Doug W. Naidus, founder and chief executive officer of IPI Financial Services, a New York-based mortgage brokerage company, said Mortgage.com's timing and business decisions were off.

The company faced pressures from debtors, particularly Intuit, which owns QuickenMortgage. According to its Securities and Exchange Commission filing, $22 million from its IPO proceeds were paid back to Intuit. On the upside for Mortgage.com, about 80% of its business is not derived from on-line originations. It markets Internet-based origination software to banks and brokers, and it offers private-label Web sites for banks.

"The utopia of dot-com companies has sprouted businesses that know as much about their product as their customers and not much more," Mr. Naidus said. "We are not selling books or CDs here; we're selling a service-oriented product. I mean, how can you increase your staff threefold, go public in a matter of weeks, and expect to get experienced people for good customer service?"

Patrick McEnerney, president of Bank of New York Mortgage Co., said that despite the Internet's shortcomings, traditional lenders must not be afraid of the risk and sit idly by.

"The chance of early communication turning into a loan is much less on-line," Mr. McEnerney said. "You need to segregate the Internet channel from other channels to manage risks due to fallout. The numbers need to be tracked separately."

Name recognition is essential, but it does not come easily, he said.

"How many people know the name of the largest independent lender? Is their company awareness as high as Amazon.com's? No, of course not." Mr. McEnerney said. "But it is very, very expensive to build that recognition."

On-line marketing partnerships prove costly, too, a study by Deutsche Bank Securities shows. iOwn's deal with the Snap portal site comes at a cost of $6 million per year to the lender. HomeShark's presence on the Homes.com Web site costs $60,000 to $100,000 per month, and QuickenMortgage's partnership with America Online has a $30 million annual price tag.

Mr. McEnerney said Bank of New York deliberately avoided being a prominent presence on Internet lending sites, but he added, "That business segment is out there; it's real."

On-line lending "is a thin-margin business," he said. "It's still not pushing back that greater value to the consumer, but over time that will happen."

Mr. Naidus said that in the first few years of on-line lending, profits have been scarce. A realistic business goal for Web lenders in their first few years is just to break even.

"The anesthesia has worn off, and investors are asking: 'In the end, aren't these all just mortgage companies -- and shouldn't they be making money?' ''

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