A former Wharton School of Finance professor has launched a Web site designed to help neophyte borrowers troll for mortgages on-line.
The site's foremost objective is to steer borrowers away from "all that junk on the Internet," said site creator Jack Guttentag.
Shopping on-line can be confusing for people who have never had a loan and may not be familiar with terms and the process. But Mr. Guttentag said Internet mortgage shopping is ideal for first-time homebuyers-provided they have a way to evaluate offers.
"The less-sophisticated or -knowledgeable person is most vulnerable to being taken advantage of when shopping traditional routes," Mr. Guttentag said. "If they are unlucky enough to fall into the clutches of a major subset of unethical mortgage brokers and loan officers, they can get taken to the cleaners."
Mr. Guttentag said fluctuating broker fees are another danger of the traditional marketplace.
"Some people will get better deals than others, and brokers will justify that by saying it's a bargaining market," Mr. Guttentag said. "But the Internet is impersonal, and prices are fixed."
The Web site has links to various articles and columns on mortgage finance and a section that provides answers to common questions on home loans, organized by subject heading.
There is also a section for browsers to submit questions, to which Mr. Guttentag said he provides answers via e-mail. He estimates that each day the site receives about 3,000 hits, with about 25 questions submitted.
Mr. Guttentag is chairman of a mortgage technology systems company, GHR Systems Inc., based in Wayne, Pa.
There is no fee to access the Internet site, and it carries no advertising, but its presence encourages mortgage lending on-line and indirectly helps GHR Systems, he said.
"Some people want obscure products like no-income-verification loans, or condo loans to an investor, or amortizing land loans. ... You really have to know where to go on the Internet," Mr. Guttentag said. "The market is thoroughly nichified, and some people have had problems hooking up to a lender in the particular niche they are looking for."
The mortgage site also includes a checklist of features that should be present on all Internet-based mortgage shopping sites, an evaluation of five major sites, and a 24-question quiz for homebuyers to find out their mortgage savvy.