This is my column for this week from the Arizona Republic (permanent link):
Zillow.com’s Mortgage Marketplace brings anonymous apples-to-apples mortgage rate quotes to consumers, free consumer leads to lenders
Wouldn’t it be great if you could get a broad array of mortgage quotes without having to make dozens of phone calls? And what if you could make a true apples-to-apples comparison among quotes? Better still, what if you could remain anonymous, making yourself known to the lender only when you are ready to do business?
Seattle-based real estate start-up Zillow.com last week released its long-anticipated mortgage lending product, called the Mortgage Marketplace, and it offers all those features and more.
Unlike Zillow’s “Zestimates,” the loan quotes are generated by real people, working lenders. Zillow will basically be acting as a hands-off intermediary between borrowers and loan originators.
Consumers using Zillow’s new Mortgage Marketplace will be able to anonymously solicit bids for loans from participating lenders. The consumer will fill out a detailed form disclosing all pertinent financial details.
The form will be submitted anonymously to participating lenders, who will, in their turn, produce estimated loan quotes, submitting them, through Zillow, to the consumer. The consumer will then have the choice to make direct contact with particular lenders to decide whom to do business with.
To a very large degree, the information asymmetry between lender and borrower will be done away with, since the loan quote will detail every fee associated with the loan. Moreover, Zillow will be implementing a reputation-management system whereby borrowers will be able to rate lenders on their performance.
In return, the lenders will receive Zillow’s mortgage leads at no cost.
What’s in it for Zillow.com? When you fill out a form requesting a loan quote, Zillow will be writing “cookies” to your local browser. They won’t be storing your financial details on their own servers, but they will be able to access those cookies in the future to target specific ads at you according to your demographic characteristics. Zillow will also be selling access to these cookies to other ad-supported sites.
So, just as with free-TV, in exchange for looking at advertising, you will get free anonymous mortgage quotes and lenders will get free mortgage leads.
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Jayson says:
Sounds like a great new product and something that many consumers will really enjoy. I wonder how long the lenders will continue to farm out quotes for people based on information that the consumer “thinks” is right. Either way, it’s a great deal for everyone involved…I’d love to get quotes without the hassle of dealing with 40 different people.
April 16, 2008 — 9:32 am
Scott Harward says:
With the changes in the mortgage arena it’s no longer just a matter of getting the borrower a rate quote. In most cases the borrower asking for the quote may not understand the importance of working with an experienced loan officer until after they have spent the time (and the money for a credit report or appraisal) to realize that the quote may not even be acheivable based on the borrowers qualifications. The old days are over…it takes a professional mortgage person to make sure borrowers qualify first, then the rate quotes can begin.
May 10, 2008 — 2:48 pm