And the media has been giving it generous attention, placing it on lists everywhere:

• Family PC's "Web Site of the Month"
• PC Magazine's "Top 100 Web Sites"
• Yahoo! Internet Life's "Best of the Best" and "100 Best Sites for 2000"

Similar online mortgage origination sites like AppOnline.com, Mortgage.com and E-Loan (reportedly the Internet's largest) are gaining notoriety as well. All promise to deliver lower rates and speedier transaction times. The question remains, however: Should they be viewed as serious new competition for traditional mortgage lenders, or as valuable new tools?

How Many Homebuyers are Actually Signing Up?
According to some traditional realtors, most online consumers report dissatisfaction. (But of course, they're only speaking with the consumers that didn't complete the transaction online.) These realtors make the case that most online mortgage lenders are located on the East Coast, making it difficult for them to find quality appraisers and other local resources across the country. This distance can also negatively impact transaction times -- one of the big boasts of every online lender. Some bricks-and-mortar realty companies still claim to beat the transaction times of online originators.

In terms of market penetration, Mortgage Bankers Association of America does not report initial success either. They predict that only one percent of the $972 billion that Americans will borrow for residential mortgages in the year 2000 will originate online.

Serious New Competition?
But HomeAdvisor and others have a notion to change all that by automating many of the steps required to approve and finance a mortgage -- including credit checks, appraisals and underwriting decisions. The company's developers believe it will save the average homebuyer more than $2,000 over the course of a loan, allow him or her to lock in a loan rate online and cut the time needed to close from 30 days to 10. This is accomplished by paring down the number of parties involved (an average of 65, including realtors, bankers, title companies, etc.) and making it easier for those remaining to communicate with each other.

Eventually, the company plans to expand its scope to address every home-related decision that consumers make -- from buying, financing and moving to maintaining, improving and selling their homes.

Whether potential homebuyers are just starting to look for a house or are partway through the process, the HomeAdvisor.com Web site offers plenty to interest and inform them. They can find and compare houses for sale across the country and obtain information about neighborhoods and schools. Another section of the site outlines the entire home-buying process so consumers know what to expect at every stage. It also provides tools to help users explore financing options, shop for rates and even get pre-approved for a mortgage.

The site includes tips on negotiating price, ordering inspections and determining which party -- buyer or seller -- is responsible for doing what and paying for what. Consumers shopping for status as well as shelter can even take virtual tours of celebrities' homes on the market.

Valuable New Tool?
HomeAdvisor Technology's Productivity Tools Division is designed specifically for the real estate professional. Their Realty Desktop is a Web-based customer-management tool for real estate brokers, providing the tools needed to expand their businesses profitably and offer a higher level of customer service.

"HomeAdvisor Technologies Inc. is the first company to deliver a real transaction platform for the real estate industry,"says Rich Cosner, president of Prudential California Realty in Yorba Linda, Calif. "I believe the platform will enable us to lower our costs while streamlining the transaction significantly for our agents and customers alike."

Realty Desktop includes software to help agents manage transactions, from securing a mortgage and ordering a title search to scheduling an inspection and securing a warranty. Every participant in the process can view and update his or her own task list and share information with others online. This not only eliminates delays inevitably caused by passing paper documents from party to party; it also minimizes the opportunities for error.

"The time we spend chasing down documents and managing paper is time lost in terms of generating leads and working directly with clients,"says Betty Smith Brassington, a sales associate in Coldwell Banker's San Francisco office and a member of its International Presidents Circle. "Having a system to expedite that process would be a great help. I would be able to deliver the best price at the least cost, with the added benefit of great client service."

Other features on Realty Desktop help agents manage their own time and task lists. When a realtor opens up a new listing, the system flags key events such as scheduling an open house, printing flyers and posting a "For Sale"sign. Once the sale is made, the desktop tracks referrals and revenue for products or services related to the sale, including security systems, landscaping and interior design. The agent concludes the deal with a complete record of activity.

What's more, Realty Desktop helps agents stay in touch with prospective, current and past clients by generating client histories and customizable e-mail messages. "It's trite but true that this is a relationship business,"says Brassington. "I make a point of staying in touch with clients even after the deal is closed. You never know when someone might want to move again or have a friend or family member who wants to move. Being able to create tickler files and templates for that kind of communication would be a time-saver."

AppOnline.com also provides a similar feature exclusively for real estate professionals. By downloading Web clippings onto the Palm VII, realtors can calculate a client's mortgage payment, calculate a loan amount based on the day's interest rate for all popular loan products, complete a short form mortgage application and perform numerous other daily tasks. "We are going to provide all of our agents with the Palm VII handheld devices so they can utilize AppOnline.com's new Web clippings," says Rick Edler, president of Edler Group / Fred Sands Palos Verdes Realty in Los Angeles.

Privacy and Security Online
HomeAdvisor.com and AppOnline.com are part of America's infatuation with all things Web. Web traffic has grown enormously: In the year 2000, the U.S. population online will grow to 137 million users, equaling about half of the overall population. The Forrest Research Group found that during the 1999 holiday season, 26 million consumers made online purchases. In addition, more than 15 million households used the Internet to research purchases that they then made elsewhere.

But infatuation does not always lead to long-term commitment and there are legitimate concerns with e-commerce, especially when it comes to privacy and security. As much as $16 billion of potential business-to-consumer e-commerce revenue is lost due to consumer doubts about privacy and security of information on the Web.

Brassington echoes that concern, saying, "A number of my clients are reluctant to submit credit information online because they just don't trust the security and privacy. Until people are more willing to do that, any software or system that offers mortgage approvals and credit checks electronically may have a hard time."

Technology and Financial Partners
Both HomeAdvisor.com and Realty Desktop are divisions of HomeAdvisor Technologies Inc., a new company backed by Microsoft and financial powerhouses Chase Manhattan, GMAC-RFC, Norwest Mortgage, Bank of America and Freddie Mac. Among them, these institutions represent more than $400 billion in mortgage originations each year, based on relationships with a vast majority of real estate and mortgage professionals.

"The mortgage market is undergoing revolutionary changes, driven largely by advances in technology,"says Leland C. Brendsel, chairman and CEO of Freddie Mac. "Through HomeAdvisor Technologies Inc., we are responding to these changes by making our suite of innovative tools available to our lending partners and enabling them to deliver a faster, more efficient and lower-cost mortgage process to consumers."

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