When it came time to refinance his loan, Matthew Bishop, a sergeant with the California Highway Patrol, turned to the Internet. It’s the third time he’s used the Internet to finance or refinance his loans.

“My time is really, really valuable. I work a lot and whatever time I have left I try to spend with my family. I don’t have a lot of time to run here and there to make arrangements with mortgage people. I wind up being a victim of their time schedules,” said the married father of three.

Bishop, who lives in Arroyo Grande, California, said getting a loan online has been nothing short of fantastic. “It’s turned out to be a real winner for me in terms of saving my time. Essentially, until everything is a done deal and I have to sign the paperwork, I don’t have to leave my home. That’s a huge convenience for me."

Bishop has discovered what hundreds of thousands of folks are discovering: Not only is the Internet a great source of real-time information about loans and interest rates, but it can save time by allowing you to actually apply for a loan online. While some companies, like Countrywide Home Loans and Dick LePre of Homeowners’ Finance, a mortgage broker who put together Bishop’s loan, have been taking applications online for just under two years, other opportunities are springing up to make the online market more competitive.

In fact, in the past two years, thousands of mortgage lenders and brokers have built websites to attract home buyers and homeowners. They’ve spent anywhere from hundreds to thousands to millions of dollars to carve out a piece of cyberspace. They’ve joined forces online with real estate brokerage companies, home listing companies, rental companies, and others who provide services to the real estate industry.

The possibility of doing a trillion dollars’ worth of loans online is enticing others to jump into the mix, industry observers say. One of the newest online ventures is QuickenMortgage 2.0. Created by Intuit, QuickenMortgage offers real-time mortgage rates and programs from 11 of the largest lenders in the country. Rumors swirl that Microsoft will soon enter the ring as well.

(In the interest of full disclosure, this column is available on Intuit’s Quicken.com real estate site and on Homeowners’ Finance, and I host a weekly chat on real estate on the Quicken.com site.)

How many loans are getting done through the Internet today? Not as many as you might expect. Dick LePre says approximately 60 percent of his business comes in online, a great return considering he spend a few thousand dollars a year on his web site. Most of his costs are covered by advertisers. Countrywide receives approximately $31 million in loans each month from its web site, a tiny fraction of its monthly total.

The future, however, looks promising. Gene DeRose, chairman and CEO of Jupiter Communications, says that the Internet is growing and commerce looks hot, and that real estate is a unique industry, perfectly positioned to make use of the opportunities offered online.

Using the Internet makes you feel like you’re at the center of the universe. In reality, doers says, the Internet represents only about 4 percent of the global online audience of the syndicated television show “Baywatch.”

Still, what the Internet does best is provide a price- and time-sensitive marketplace for shoppers.

Business owners Jon and Peggy Fischrupp decided to move from their Ft. Lauderdale, Fl. condo to nearby Pompano Beach. They already had a loan with Countrywide, and decided that’s where they’d apply for their new loan.

If he’d had the telephone number of the local Countrywide office handy, Jon Fischrupp says he probably wouldn’t have gone online. But he didn’t, and so he ended up at the Countrywide site, where he plugged in the information.

Described by his wife, Peggy, as a "computer freak," Fischrupp says he wasn’t concerned about the security of his sensitive personal finance information on the Internet. “I wasn’t apprehensive,” he said. What he liked about the Internet was that he got an extremely low rate through Countrywide’s Gold Credit program.

“I wasn’t sure what I would find online at first. I was investigating rates and other stuff. But I’d recommend applying online. You get a better rate than outside the Internet,” he said.

But because Fischrupp wasn’t prepared to spend time price shopping a bunch of different lenders, he didn’t find that using the Internet was a much faster process than simply calling the lender directly. He also says using the Internet doesn’t necessarily speed up the loan process.

Dick LePre, of Homeowners’ Finance, disagrees. "The best thing about applying online is that we can electronically take the information and plug it into our application form. We don’t have to spend time retyping it. Then, we can pull an electronic credit report and send the whole thing to underwriting. We typically pull applications off the Internet only once a day, but if someone calls me in the morning and asks me to put their online application through quickly, we can get an answer for them in 30 minutes or less,” he said.

Juan Sanchez refinanced his Simi Valley home through the Countrywide site. He says his favorite feature is called “Rate Watch.” “Basically you plug in what loan you want and Countrywide emails you when it’s available,” he said. "It took about a month and a half, but I got the e-mail that the rate was available. Then I applied online. Man, it’s the way to go.”

Sanchez said he wasn’t confused about applying online for the first time because he’d bought or refinanced homes ten times.

“I kind of already know what they’re going to ask. There were some things I didn’t have right on hand, but I could save it (the worksheet). The next day, I found the information, called up my loan with a reference number, filled it in and zapped it. The next day I got a phone call saying they received the information and were going to send the paperwork to the local office."

Sanchez said one of the best parts about applying online is the elimination of the redundancies. Once you apply online, that information is then preprinted onto the forms that need to be signed. “The only thing I had to do was sign the papers and submit my taxes and that you can’t do online.”

“I highly recommend (applying online). I never even met my loan rep. I just talked to her on the phone. It’s painless,” Sanchez said, adding “Unless you have time to kill, it’s the way to go.”

But if you think the non-Internet world of mortgage lenders and real estate brokers is going to go away, think again. There will always be people who don’t like ATM machines and refuse to use voice mail. In fact, if it were up to Peggy Fischrupp, she and her husband would have gotten a loan the old fashioned way — by shopping around on the telephone.

“I hate the Internet. I’ve seen more downtime wasted. I just don’t mess with it, and it doesn’t intrigue me at all,” she said.

Did she feel excluded from the process because her husband handled the loan online?

“Not at all. I’m involved with everything. I sign the papers. When I applied for a mortgage for our other home, I picked 11 lending institutions out of the business section of the paper. I;m still the one person who goes into the bank. I like to see those tellers and see the money cross the counter,” she added.

March 15, 1998.