Seattle-based real estate start-up Zillow.com tonight releases its long-anticipated mortgage lending product. We’ve known for nearly a month that Zillow’s offering would include working loan originators in some fashion. What becomes clear tonight is that Zillow will basically be acting as a hands-off intermediary between mortgage-seeking clients 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 quasi-pro-forma 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 is 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 their lenders on their performance.
In return, the lenders will receive Zillow’s mortgage leads at no cost.
The new service is expected to come on-line at 9 pm PST tonight. I made screenshots in the product demo teleconference I attended today, but my expectation is that these will be obviated very shortly.
Elsewhere: Todd Carpenter, Rich Barton, John Cook, Drew Meyers, TechCrunch, Rhonda Porter, Spencer Rascoff, Joel Burslem, Kevin Boer, Jay Thompson, Rhonda Porter (again), Pat Kitano, Morgan Brown, Trace Richardson.
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