Mortgage lenders grapple with rise of e-competition.(Brief Article)

The once-staid mortgage financing business is starting to shake up and wake up to the challenge posed by aggressive new entrants such as virtual banks. That was the general tenor of a Toronto conference sponsored recently by Vancouver-based mortgage administration specialist Plexus Systems Design Ltd.

The new Internet players, among them Quebecor-owned i|money, a division of Canoe.ca, and the international provider E-Loan.com, are creating an unprecedented level of intermediation. Old ways of thinking and operating practices are being called into question, as are the traditional supply chain and even the essential nature of the mortgage product itself.

The conference brought together mortgage and ratings agency experts from Canada, the United States and Britain, as well as traditional primary lenders and newcomers staking out uncharted territory on the e- financing frontier.

In this brave new world, shopping around for a mortgage or the best refinancing rates and terms begins to take on a whole new meaning for consumers. Although plenty of barriers, including the need for original signatures, must be overcome to achieve paperless end-to-end mortgage transactions originating on line, the reality isn't far off.

Currently, it's estimated that in the United States only 1.5-2% of mortgage loans originate on line. But Forrester ...