Allied Mortgage Rides Approval Express to Success.

Business Editors

HOUSTON--(BUSINESS WIRE)--Nov. 2, 2001

Company's consumer-driven, Web-based loan approval doubles

Internet origination volume; Customers choose lengthy application to

get immediate approval over shorter pre-qualification form

Allied Mortgage Capital Corporation reports its October 2001 Internet-based mortgage loan origination volume increased 131 percent compared to previous months; and consumers are choosing to complete the more lengthy online loan application versus the shorter pre-qualification form.

Allied attributes the increase in loan volume to the August launch of its new Approval Express, which enables a consumer to get a loan approval decision, not a loan pre-qualification, within minutes after completing the online loan application, anytime -- day or night.

The Approval Express technology is embedded in Allied's 600 consumer Web sites. Approval Express represents the integration of a newly engineered interactive loan application with Freddie Mac's Loan Prospector automated underwriting service.

"This is not just a conditional pre-qualification. It is a real loan approval backed by one of the largest financial institutions in the mortgage industry, Freddie Mac," said Allied Executive Vice President, Ron Litt.

Since the launch of Approval Express, Allied's Web-based loan originations have steadily increased from an average monthly volume of $57 million to a record of more than $132 million in just three months.

"Our Web sites offer the consumer a choice between an Approval Express application and a short pre-qualification form," Litt continued. "The pre qualification requires interaction between a consumer and a loan officer before a preliminary decision can be rendered. Consumers who take the time to fill out an application are demonstrating that they are in the market and are going to make a decision. Being able to offer an immediate decision is positive reinforcement of their commitment and Allied's desire to help. Those who use the pre qualification may have a longer time horizon or may be using it just to compare rates."

"Three quarters of the consumers who apply on our Web sites are choosing the more detailed Approval Express application, and twenty-three percent of those who actually start the loan application, complete it and ask for an approval decision," added Allied CEO Jim Hodge.

Hodge continued, "The conventional wisdom on mortgage Web sites is that people will not spend time filling out lengthy forms. So most sites are designed to collect only a minimum of information. Allied believed Approval Express would be successful, if we fulfill a customer want. The American culture is a `right now' society. So we give the consumer an immediate decision; they know where they stand right then. That the decision is made without strangers evaluating their financial status is another important factor. The anonymity of an automated response makes it nonjudgmental."

"Our strategy seems to have paid off," Litt commented. The ratio of loan applications to pre-qualification requests is usually about 1 to 1. After the release of Approval Express in August, the number of applications increased dramatically. In October, the ratio of applications to pre-qualifications was more than 2.5 to 1.

"Even though the form is long, we designed it to be easy to complete," said Litt.

There are checkpoints along the way that tell the applicant what remains to finish. The application doesn't have to be done in a particular order. The customer can jump to any part of the application, save what they've done and complete it later. There is even a `How Am I Doing?' tool that checks the application as they go. If customers have trouble understanding the form, they can initiate a live chat session, during normal business hours from the Web site to a local Allied office and get their questions answered.

Allied Mortgage Capital Corporation, founded in 1991, grew rapidly into the largest branch network company in the United States. Allied currently has more than 650 branch locations stretching from across the U.S., Guam and the Virgin Islands and is affiliated with more than 800 investors. You can find more information about Allied at its Web sites located at http://www.mortgageasap.com and http://wwwbranchasap.com.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass through securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened doors for one in six homebuyers and more than two million renters in America. More information on Freddie Mac can be found on the company's Web site located at http://www.freddiemac.com.

For further information, contact Ron Litt, 713/353-0400.