This is not encouraging.
DLJdirect launches online mortgage service
JERSEY CITY, N.J., Aug. 4 (Reuters) - Online broker DLJdirect Inc. (NYSE:DIR -
news), a unit of securities firm Donaldson Lufkin & Jenrette (NYSE:DLJ - news), said on
Wednesday it launched a mortgage program where investors could get quotes, apply and
prequalify for loans online.
DLJdirect, the latest Internet broker to break into the banks' stronghold businesses, said its
mortgage service was the result of a partnership between DLJ and Prism Financial Corp
(Nasdaq:PRFN - news), which originates mortgages online.
Brokerages like Merrill Lynch and Co. (NYSE:MER - news) and Charles Schwab Corp. (NYSE:SCH - news) already offer
products like checking accounts and automated cash machine cards that are pulling depositors away from traditional banks.
The droves of investors managing their finances over the Internet also has spawned a host of Internet-only mortgage lenders
like E-Loan (Nasdaq:EELN - news) and Mortgage.com (Nasdaq:MDCM - news), in addition to banks' online offerings.
DLJdirect's mortgage services, available through (http://www.DLJdirect.com), also allows qualified customers to use their
securities accounts as collateral for mortgage loans, in lieu of a customary cash down payment, it said.
''We believe we will be the first online broker to enable customers to use their investment accounts to secure mortgage loans in
this fashion,'' Blake Darcy, chief executive of DLJdirect said.
Qualified borrowers who pledge securities to obtain 100 percent financing for themselves through DLJdirect's Account Power
program or for family members through a Family Power program would be able to keep investment portfolios intact and defer
capital gains tax liability on those invested assets.
Customers could still trade in their accounts as long as the required amount of equity was maintained there. The two programs
were available in fixed-rate and adjustable-rate mortgages as well as an interest only option. DLJ would provide secondary
market execution for all these sorts of loans. |
