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Financing Business Continues To Click For Goodmortgage.com

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CHARLOTTE, N.C. — Charlotte-based


is grappling with rapid change within two areas: technology and the mortgage industry. But the company, founded in 1999, has been able to adapt to the changes and meet the challenges, and so continues to thrive in a market that is increasingly competitive.

Indicative of the company's optimism about the future, it recently acquired trademark right to its tagline: "Where Loans Click." Goodmortgage.com is an Internet-based direct lender active in 13 states. That is different from Lending Tree - also headquartered in Charlotte - which is a loan referral website.

Responding to a changing environment requires balancing "high tech" with "high touch" said Goodmortgage.com founder and Chief Executive Officer Keith Luedeman. For example, even three years ago, the loan application process still included lots of paper either being mailed or faxed. Now it's completely electronic. Currently, half the appraisals done are handled electronically as well. Phone calls and e-mails from consumers asking about their loan's status have been markedly reduced as Goodmortgage.com has started to automatically send e-mails twice week updating the consumer - and their realtor - about what's going on.

The only part of the process that still requires paper is the signing of the final documents. E-signatures, said Luedeman, are still about three years away. "There's still so much left to do, but state laws, lender rules and banking commission requirements are coming closer to agreement," he said.

The technology has lowered costs, but also saves consumers time, "which is even more important than saving money," Luedeman said. It also means the company can process more loans with the same number or fewer people, so that every new hire increases the company's capacity exponentially.

But every time a step is further automated, "we lose the high touch," Luedeman noted, "and so we are on the razor's edge. We need to offer the best of both worlds."

For many consumers, buying a home is the largest financial transaction they make, so, Luedeman said, building customer relations, trust and comfort levels are important. To help do that, the website includes information to help people become better consumers, such as self-service tools, mortgage calculators, a 'mortgage school' and helpful tips. Staff members are available to answer questions before an application is submitted (as well as when they are being processed), and they often act more like loan counselors than salespeople. The company's toll-free number is prominently displayed throughout the site.

In addition, when loan applications are received, they go through a filtering system that sends each application to a representative best suited to meet that borrowers needs. For example, Luedeman said, Baby Boomers go online for a mortgage looking for the best deal, while the generation behind them wants a deal, but also wants to be educated. On the other hand, recent college grads, he said, "are looking for something cool, so we have to add the coolness factor."

That is coming in the form of www.goodmortgage.tv, an informational portal that features streaming video on a number of topics. It is in the process of being developed, and there are also plans for a chat server. "This generation is addicted to cell phones and text messaging," Luedeman added.

But the Goodmortgage.com website doesn't exist in a vacuum, and it must also stay on top of trends in the mortgage business. Three years ago, the company, riding the wave of low interest rates, saw most of its loans go for refinancing. Now, more than half of its business is for purchases or home equity loans. "You can't stay in a refinancing boom forever," Luedeman said, "and we're back to normal,"

Higher rates have also meant the number of lenders is shrinking. "Contraction is good for market health overall," Luedeman said. "There were too many companies out there. Some of them, frankly, were just out for a quick buck, and when things go back to normal they fade away."

Not only do higher rates mean fewer competitors, they also increase other opportunities as well. "When interest rates go up, people shop around more - and these days they go to the Internet to shop," Luedeman said. He cited research that indicates that 95% of homebuyers go online during some part of the buying process, either to find or gather information about a realtor, a home or a mortgage. He said he is not is sure many end up getting a mortgage online, noting he has seen estimates of the percentage of home mortgages made online range from 8-37%.

According to Luedeman, his company's revenues have increased 70% annually. It has been listed by Deloitte & Touche as a Rising Star, as a North Carolina Technology Fast 50 and as one of the Fast 500 Growth Companies in North America. In 2002, Luedeman was named 'Entrepreneur of the Year' by the Charlotte Chamber of Commerce.

Goodmortgage.com recently added five to its staff, bringing the total to 42. It is recently started advertising offline for the first time. "We're just getting into branding," he said.

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