I might have been hasty in my original assessment of the Zillow Mortgage Bourse. I sometimes suffer from TB; true believer disease. I’m one of the few guys in the mortgage business that actually wants to see the cost of loan acquisition, for the consumer, dramatically reduced. I have never seen my role as a middle-man. I see myself as part financial adviser and part trader.
Permit me a digression:
I have always considered yield spread premium to be the borrower’s money. I have aggressively used it in serial no-cost refinances, throughout the late 90’s and early part of this decade. Critics, don’t bring up the issue of churning. I assure you that every transaction I funded has a tangible net benefit to the borrower.
When a borrower gets “into my web”, by closing a loan transaction, I conduct periodic mortgage reviews. Jillayne Schlicke once commented that the periodic review is just an excuse to “sell a refinance”. My response is a bawld one: “Well, Duh!“. We should ALWAYS be looking for an excuse to refinance the borrower’s loan…IF…there is a tangible net benefit to the borrower AND I get paid. Call that the way of the trader. Traders look for opportunities to profit off market fluctuations.
I digressed but I wanted to give you some background. My initial concerns about The Zillow Mortgage Bourse were two-fold:
1- Customers don’t know what they don’t know. I pontificated that the customers would be EXTREMELY difficult, focusing on price rather than suitability. I found the data byte, on the loan request form that distinguishes the client’s intent. This is the real Web 2.0 offering of the Zillow Mortgage Bourse.
2- I felt that consumers could game the system, waste originators’ time, and damage our reputations if they didn’t get exactly what they wanted when they wanted it. I also thought they would “steal” the advice we offer, and engage in a perpetual RFP process until they found the lowest price. That happened often in securities brokerage Read more