Earlier this month I wrote about Zillow stepping into the mortgage rate quote arena…well tonight’s the big night. They are scheduled to launch at 9 p.m. PST. I’m honored to have been included as one the mortgage professionals to review their product and it will be interesting to see how it develops.
Zillow is not creating a mortgage company; they are attempting to create an online tool consumers can use to shop lenders. Once I get past my first objection of rate shopping, here are some of the two features I like the most:
The consumers privacy is protected while shopping–the Loan Originator will not see their names and they do not provide their social security number. This is unlike other online rate-comparison tools where a consumers private information is resold to calling centers all over the world.
Consumers will have the ability to shop lenders by rate, cost and the Loan Originator’s Zillow reputation. Zillow has a rating system from 1 (bad) to 5 (great) that consumers can use to grade the LO. So let’s say LO Sally has an incredible rate and low costs but she’s rated a 1 vs. LO Joe who has a competitive rate and cost with a 5 rating: the consumer can make a choice between the two (or however many LO’s have submitted a rate quote). The consumer will be able to review the LOs lined up in an easy to read column format with this information easily viewed.
My only real concern, as I’ve voiced many times is that shopping for rate will not always land you the correct mortgage. The wrong mortgage with what appears to be a low rate/payment may be a very expensive mistake. Especially in this volatile market where mortgage rates can change 3-5 times per day. Any rate quote may be invalid the moment it’s sent to the consumer if the rate is not locked…this is true with Good Faith Estimates as well. Speaking of GFE’s, Zillow Mortgage quotes are not the same as a GFE–I do recommend that consumers who are seriously considering working with any of the Loan Originators participating on Zillow Mortgage obtain a Good Faith Estimate with the Federal Truth in Lending.
I’ll still stick to my guns and say that referrals from the people you trust and respect are the best way to select a Mortgage Professional…however for those of you that have a need to shop rates on line, Zillow’s mortgage tool could be the ticket.
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One challenge I just noticed with this market is that after market pricing may not be available for the rate quotes in the evening…thus making after hour quotes a little more challenging to be accurate…come the new rates in the morning, you’re either going to look like a hero (because rates are actually higher) or a loser (because rates are actually lower than what you quoted the night before.
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Kim and I were in on the conference call presentation earlier today by David G. and I really liked the concept. I clearly would recommend that my clients utilize the service.
It keeps the borrower in control without their having to divulge all of their personal info. They get tons of quotes, they get to see the costs, they get so see their mortgage payment, and it’s all based on the info they provide. Much better than generic websites that give info based on 720 credit scores that are meaningless to someone with a 680 score.
I would caution people to put in their MID score and not their high score for more accurate results. I do wish they had a feature for saving the better quotes and deleting the rejected ones. I think that would be easier for people to manage, but I’m sure if that feature is useful and needed, they will add it somewhere down the line.
I’m not sure how the rating system will work, we all know people find a way to game those things. But it will be a very useful tool for a lot of people.
If salespeople didn’t harass people so much we wouldn’t need these anonymous means of gathering information. But once salespeople have someone’s phone number or email address they are relentless! So kudos to Zillow for finding a means for people to get a ton of info…without revealing their contact information. I think many will put this new tool to good use.
Sorry for the long comment Rhonda 🙂 I didn’t want to have two posts up on the same topic.
Your comment is great Ardell. Here are a few thoughts I have…
Regarding credit score…lenders use the middle of the lowest scoring borrower. So if you have a couple or two borrowers, using Zillow’s system, if you want an acurate quote, you better use the less shiny score.
I’m also wondering what type of LO’s will use this. I threw my hat in the ring…in fact I was one of the first to sign up…but I’m not sure I have the time nor do I want to play “lets see who can beat who by $50” lender rate quote game.
You know I’ve always said there’s so much more to the mortgage process than rate–especially now.
Maybe Zillow will start a quoting system for Agents next when Agents can out bid each other on how low they’ll go on a listing? 😉
I like the idea that people can get an immediate idea of what they can qualify for, but I am 100% in agreement with Rhonda.
I’d have serious reservations if clients chose a lender from this venue rather than in person. There is way more to the mortgage process than rates. Competence for example.
I asked for an anonymous zillow quote. Where is it? It’s been 5 minutes now. Surely there is at least one licensed mortgage lender for Washington state signed up for this gig that works past midnight, right?
Right?
Where’s my rate quote?
Six minutes now.
Seven.
I have to drive a teenager home. I’ll be back.
Rhonda, give the lady a quote!
Rhonda’s asleep. Here’s my favorite quote:
“Anyone can become angry – that is easy, but to be angry with the right person at the right time, and for the right purpose and in the right way – that is not within everyone’s power and that is not easy.
Awww. You know how I love Aristotle.
Well, it’s 12:38AM and still no loan quote.
Oh well.
All male teenagers are now safely home, far away from the female teenagers. Wish me luck at surviving spring break!
Geez Ardell…giva a gal a break! I was sleeping…I was so tired (still recouperating). I’m not angry…if that’s what’s being implied. This is a tool for those who have the driven need to shop rate quotes vs referral and who are not interested in working with people they have developed a trusted relationship with–nothing wrong with that.
I also do believe that you can watch Zillow step into the agent commission arena next. Why not? If this is successful, why not let agents hack each other down over buyers and listings? Zillow digs duals…just ask Gordon. 😉
I actually did two quotes on Zillow Mortgage Marketplace just out of curiousity around 10 pm…it’s intresting you weren’t ablet to see them. I wonder if you need to be registered as a Zillow LO to see quotes?
I don’t see myself hanging out at the Marketplace. It’s time consuming and I have to put my bona fide clients and relationships first over those seeking a quick quote that may be invalid to undercut by $50. If a LO is new and lacking businsess, this could be a great place for them.
I foresee a lot of headaches for agents, and extensions of closing dates because docs were not available on a timely basis.
No implications Rhonda. Just joking with Jillayne. That just happens to be my favorite quote.
Jillayne, who would be responsible if the APRs on Zillow’s quotes are not accurate? I’m looking at one right now quoting 5.75% note rate with an APR of 5.75%….
Quoting wrong with no possible way of delivery (they can just say ‘we had that today, but of course we couldn’t do the deal in one day …)
is a typical problem in these kinds of things.
This doesn’t seem like it will be much different from the weekly rate quotes provided by the newspapers, just a faster rate quote, and more interactive, but still not the best way to HOOK UP with a great lender!
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Leanne, you’re right that the wrong APR on Zillow Marketplace is no different than the wrong APR (or no APR) in the newspaper. This is again another reason why consumers should NEVER shop by APR.
DFI will investigate APR issues in print, websites…etc. This is one reason why I’m wondering who would be found responsible for the wrong APR if the LO does not have means of correcting it since it’s a calculation done by Zillow.
It will be interesting to see how this plays out. Lending has now become a true contingency in the real estate world and savy sellers and their agents are looking very hard at the loan situation before accepting an offer. If the buyer is using someone online…the first gut reaction is a red-flag with the lending changing daily and programs being dropped. Time will tell. Hopefully it works out to be a good model.
Hi All,
Zillow told me earlier this week that their system computes the APR.
Update: I have received one mortgage quote.
30 Yr fixed at 5.875
APR 6.00
Lender fees:
0 origination
0 discount
0 mortgage broker fee
395 application fee
355 processing
355 underwriting
185 wire transfer
Rhonda, is this rate available today anywhere?
Jillayne,
Email me your “scenario” and I’ll let you know.
My point is, what if Zillow’s apr is wrong by more than the allowed variance? Who would be found responsible by the regulators? the LO or Zillow?
that’s kind of an expensive wire transfer fee, eh?
and no title or escrow fees.
Z says title and escrow are 3rd party fees quoted separately.
Jillayne, lock that rate! FAST. Although the LO could be betting on a weak jobs report tomorrow and therefore, they just may come out smelling like a rose and win on their gamble.
I certainly hope consumers understand title and escrow fees are not being included in the estimate. That’s a significant cost to the transaction.
Please follow up with the lender and get a full GFE and TIL…this ought to be interesting.
But, but, but….
then I would have to become UN-anonymous.
I don’t want my credit report pulled and subsequently watch my credit score go down!
How could this LO offer this rate with no mortgage broker fee, no loan origination fee, and no discount points?
You don’t have to allow the LO to pull your credit…I think you can request a GFE/TIL.
Like I said, they could very well be gamblers…betting on tomorrow’s jobs report and/or new to the biz and happy to make very little revenue or another possibility is that they’re paid 100% of the commission instead of having a split like most LO’s.
Do I have to officially apply for the loan in order to get a GFE? Like, an entire loan application?????
Can I just request a GFE?
I believe you can contact the LO directly and let him know you would like a GFE/TIL without your credit ran and without an ap…based on the info you’ve provided to support the z quote he provided.
Okay, I sent a request asking for a GFE and TIL to be faxed to my home fax tonight, that I was still in shopping mode and did not want to apply to any particular lender just yet.
Jillayne, I think that’s what shoppers at Zillow’s Mortgage Marketplace should do: 1) get a preliminary quote and then 2) if you’re interested, have the lender follow up with a GFE/TIL.
The estimates at Zillow ARE NOT complete GFEs and shoppers do not (and should not) allow the LO to run their credit until they decide to proceed with them.
The Zillow mortgage offering is an interesting idea, and I think it will help push the industry towards offering more transparent pricing. However, I don’t think this is ultimately where the market is headed.
Why should consumers have to enter their information and wait to get contacted for a quote? Why can’t they go to a lender’s site, enter in some of their information anonymously and get a reasonable quote?
Some players are starting to figure this out. For example, BECU will give you a quote and offers a full application online. The site is remarkably well designed and includes detailed information on estimated closing costs, fees, and their rate lock policies. What I can’t say is whether or not the price quotes are accurate or how prices online compares to walking into a branch off the street.
If lenders offered a reasonable online portal they could begin to leverage some of the advantages of technology. Why can’t lenders offer transparent pricing, rather than driving customer leads to a bank branch or lending center?
Lax:
Because lenders want to make the largest profit they can.
There’s is insufficient incentive to offer the LOWEST rate up front.
I’ll go play the Zillow game soon. Thanks for sharing.
Roger, I look forward to what you think…I think “game” is an appropriate term. Brian Brady did a good post over at BHB regarding “not wanting to be first” to make an offer…I totally relate and I don’t see myself being a “player”. I even unsubscribed from email updates of new “leads”. It’s a huge time commitment to play the Zillow mortgage game and I’d rather dedicate my time and efforts to my bona fide clients. 🙂
Please let us know what you think after you visit.
Jillayne, did you get your GFE? If your ZMLO was gambling the rate on the jobs report, they did well. The industry is full of rate gamblers.
Hi Rhonda,
No, nothing yet.
Hello Jillayne,
As to comments #7 & #10, surviving spring break, did you try interesting your teenage charges in the project of mailing dollar bills back and forth to Mount Vernon?
Sincerely,
Chris
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WAMU just announced that they are pulling out of the wholesale channel.
Last day to submit April 10th, must fund by June 16th.
This is just too sad….they were a good wholesale lender.
I never cared to work with WaMU…I managed to send one loan to them over my mortgage career. I prefer lenders we have a correspondent relationship with. These are interesting times.
Jillayne, it’s been 4 days since your rate quote and a request for a bona fide GFE from the lender at ZM…any luck?
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