E*Trade has launched its online mortgage service.
E*Trade Mortgage, formerly known as LoansDirect, was acquired by the E*Trade Group in January 2001. The company relaunched the service under the E*Trade Mortgage name this month. By adding a mortgage service, E*Trade signals that the company wishes to diversify its product and service offering.
The company’s MD for North America, Mitchell Caplan, has said that the launch of E*Trade Mortgage means that the E*Trade brand no longer just stands for brokerage. Furthermore, the launch of a mortgage service puts the company ahead of its competitors, because no other online broker currently offers such a service. It also adds a new and important source of revenue for the company.
E*Trade Mortgage has received more than $1 billion in funding from E*Trade Bank. Currently, the unit offers a real-time Internet mortgage service, coupled with telephone consultancy. In the future, however, the company plans to expand the service and improve functionality, the overriding idea being that E*Trade will be able to offer an integrated banking, trading, and wealth management service to customers. The new mortgage service will provide the company with an important ‘springboard’ into the consumer credit market.
While the launch of a mortgage service is part of E*Trade’s wider aim of providing a more comprehensive service to customers, the service expansion may also be a necessity. Plenty of online companies have had to shut down recently thanks to financial difficulties, and the companies that have a limited product or service offering have been the hardest hit.
Launching new and additional services will allow E*Trade to reach an increasing number of customers, increase the likelihood for cross-selling, and thereby increase its revenue potential. Consequently, the firm’s chance of staying in business and making a profit will also increase.
