There is an army of foot soldiers on the other side of these nice web façades banking on your ignorance. DiTech, Lending Tree, e-Loan, Quicken, and a slew of other 'e-Lenders' have created convienient web-sites to exploit and facilitate the deceptive nature and huge revenue streams of the mortgage industry.
Selling inflated rates that pay huge premiums at the expense of the consumer is still the name of the game and these guys are doing it more efficiently than ever.
E-lenders are likely to be much more expensive than a local mortgage brokerage or bank. Most of them are mortgage bankers (also called Direct Lenders), who have the very special privilege of not being required to disclose all fees associated with obtaining a mortgage. This is more than just opinion...click this comparison between DiTech and Wholesale Direct Rates.
The problem doesn't end with the e-lenders, their model is fostered by 'spider-web' - information aggregation (IA) sites like Bankrate.com and Lending Tree, which amount to little more than advertising platforms with a catchy URL and an interface that offers some generalistic industry information and remedial finance tools. Just about any broker or banker may advertise on or through an IA, thus making the site no more reliable than the paying broker/banker on the other side. Visiting any of these sites in hopes of researching accurate mortgage rate and program information is the absolutely futile equivalent of rate shopping through the phone book. Finding an honest and transparent broker or banker through an IA is analogous to playing Reverse Russian Roulette; 5 bullets, 1 empty chamber.
'Their' perception is your reality....Look past the message, through to the entity that's providing it. What's their incentive? Change your perception and 'their' reality!
**Zillow has even recently added a Finance Tab which is a patch link to these 'misinformation' sites. Although we love Zillow, affiliation with such advertisement services defeats their message of 'helping people make smarter real estate decisions'.
Great Topic Jeff, the publice needs to know the truth.
Bankrate is already starting to get into trouble over the information on their website. There was a lawsuit filed against them from my understanding.
The other thing companies do is guarantee their services in some way. But when you look at the fine print, it is nearly impossible to make the guarantee. I like to keep things simple, so I offer a guranty that is no hassle and does not include weasel clauses. I would like to see those guys offer the same and not lose money!
Robert...Dead on! Ill be making a post 'Guranteed Services' in the next few days. How long have you been in the industry?
Ken...Thx for the tip..changing now!
What a provocative title!
I would disagree with Ken inasmuch as the "open posting" will further rank you in the search engines along with the aforementioned "thieves". You have a valid message that should be seen by the public REGARDLESS of the rankings.
If I understand your profile correctly, you intend to offer "correspondent" pricing to the public via a search engine. Then the consumer will "hire" a broker to process the loan.
Will the consumer come to us with 3-4 loan options, negotiate a fee and ask our advice about those loan options? I'd be in favor of that.
Thx Teresa...Im a big fan of your blog! 'Found' you via Pat @ TransparentRE...
As Robert stated, the light is shining brighter on these 'mis'information sights. Desperate times call for desperate measures, on their part ;)
Wow...comments coming in faster than I can respond!
Yes, Brian, you are pretty close...shoot me an email and I can give you the 'Full Monty'....xbroker@thexbroker.com.
I don't love Zillow...
Rich Jacobson, www.KitsapLife.com
Well sense you decided to go back to making this public you could just remove the live links to the sites and just list them as bankrate.com and lendingtree.com.
BTW, the chances of this post rating in for a term that would see any traffic for terms that will effect any of the e-lenders is next to none. Those are some very tuff terms that one little post from a blog will not be able to rate for.
Jeff,
I have never understood why people would rather do business with someone over the phone or internet when it comes to financing the most important thing you will ever own. I can honestly say that when it comes to my clients, I make every effort to meet them face to face for the application, keep them up to date on a regular basis, and show up for the closing.
These large firms cannot promise that kind of attention. Plus, I am a small business. I don't need all the thrills of having a big office. The bigger and more extravagent also means the more expensive. For those guys to continue paying for the high rise office, the media attention, the marketing, etc, someone has to pay for it. The sad thing is that it is John Smith down the street or Sally Jones in the next town over. Smaller companies have the edge of giving their clients a much cheaper loan. We need to go back to our grassroots and support the local mom and pop businesses. They know how to treat people right. Big business has never cared for the person, just their money.
Great Blog !! I can't understand how anyone would want to get a loan online. It's insane...
I actually thought that a lot of the online mortgage companies are actually "Lead Generators."
Buyers don't seem to realize the supposedly "low" rates offered by the online lenders are often just part of the sales pitch. In my experience, the low rates usually increase by the time of closing, and the closing costs are outrageously high. But, these lenders know that once you get to closing, the buyers is kind of stuck, or they may lose the house and their deposit. I strongly recommend my clients use a local lender. Not an online lead aggregator that sells their loan and information to the highest bidder. I believe it will save them time and money in the end.
Jeff,
Awesome, where else would you find a better put together blog and the truth.
Thanks for helping us all understand what is going on in the mortgage world.
Zillow...I 'love' their vision (and proprietary search bot/crawler) to aggregate property data for anyone to use free of charge...maybe admire is a more appropriate term....Their values are, in most cases, 'way-off'. Hoping this improves as they add more and better resources to mine their data from. At the very least the property tax information available provides a quick and centralized resource for typically fragmented info. I think Zillow has much bigger plans up their sleeve, but will keep my thoughts for now...Was very disappointed to see them 'fall' to the big $$ paid by Bankrate and Lending Tree to advertise on their site, knowing the underpinnings of these mis-lead-ing info aggregators. I guess they gotta pay the bills :)
Thanks all for the comments, you have inspired some new post topics for me!
Those agent connect services are the biggest jokes. I believe there will be a backlash on them.
Woodstock Real Estate