I have been active on Zillow for almost more than three years now. While I understand business and reasoning for profits on sites such as Zillow and Active Rain or any other business for that matter, it seems that Zillow may have just "Screwed the Pooch" so to speak today with their new roll out of their mortgage marketplace.
While I am not an attorney, it appears at first glance that Zillow could be in for some unsuspected surprises from changes that they initiated today online.
For weeks now Zillow has announced coming changes to lender participants who have paid a fee to register their profile and company information on their website. Unfortunately, Zillow was and still can not accurately disclose their new pricing mechanism to any of us who participate in their mortgage quoting section. Zillow plans to charge a fee which can vary for competing with other lenders who wish to quote interest rates to borrowers who submit loan requests. In Zillow's initial release of information, they indicated that these leads might range from $ 0 to $ 100 or more PER customer CONTACT.
I could write for hours detailing the various pros and cons of their new idea to generate revenue. All you have to do is go to Zillow, and search under advice for mortgages to get a gist of what I mean.
While I could ramble on for hours about the horror stories of the Zillow Mortgage Marketplace feature, it has been evident that Zillow is truly only interested in increasing revenue vs. being a good tool for borrowers and lender participants. What was once a manual system where lenders input responses, is now a system where lenders can automate their quotes through what Zillow terms API providers.
A client places a request, and instantaneously through the API providers they get 30, 50 and many times over 100 responses to their request. Not only is the client overwhelmed by all of the responses, but those of us who participate have charged for months that the policing of this forum is truthfully lacking. Most of our complaints stem from those lenders who quote outrageous rates, or omit alot of pertinent information regarding closing costs.
Since Zillow's recent announcement, I have watched and read comments from both lender participants and Zillow emplyees about the pending changes. Yes, I had my concerns, but I also agreed to hang in there until the dust settled.
I have for years and continue to do so by answering questions from Zillow visitors from across the nation. I'm a little irked since my response count is higher than what shows as Zillow introduced a new system a year or more ago that whipped out my comments countdetail. I can tell you that for all these years, I have daily answered questions in their forum. Quite often I am contacted by those in other states that I can not help since I am only licensed in California. I still answer these calls, and can honestly say that I have gotten enough loans from Zillow to warrant doing so. I figure that if I am helping someone, it will eventually come back to me by following " The Golden Rule ".
Many other lenders such as myself have been faithful Zillow participants which has helped to contribute to their success.
Today, we had the doors slapped in our faces. Below are the areas if critical concern.....some of which are legal in nature. I use an outside compliance consultant to ensure that I am keeping up to date with all the changes......and believe me there have been and will be many more coming down the pipeline:
First, we participants were assured by Zillows representatives that we could still participate on the question and answer boards free of charge, And that potential clients could still reach us through our profile information without a fee.Those of us who previously manually quoted responses to client loan requests can no longer participate in that feature without paying a $ 250 deposit which will be used to deduct charges when Zillow goes live with the charging mechanism for "Customer Contact" in December.
Zillow stated that until the system was fully tested and analyzed for fee structure that no charges would be made until the official December date. We still had to make a deposit to participate, but charges would not occur until final roll-out.
Today, many of us participants were shocked after we investigated the email from Zillow this morning. Most noticeable was the fact that those of us who paid to become " Confirmed Lenders" through license check had our contact information changed. Bogus toll free numbers were put in place, our email and web site addresses deleted from our profiles. IT GETS BETTER!
So much for Zillow's assurance that customers on the chat boards could contact us for information or possible business!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Part of Zillows new feature to help fight bogus customer requests is the monitoring and recording of calls made to lenders through the site. Zillow has apparently assigned bogus contact numbers which are then routed to our real numbers. Per Zillow, any calls made would be RECORDED. WHEN I DIALED MY BOGUS NUMBER, I HEARD NO SUCH RECORDING SAYING THIS CONVERSATION MIGHT BE RECORDED.
Now I am not an attorney, but from many of the responces on the board, this is the equivalent of wire tapping and in violation of FTC rules.
As a lender.........and some Realtors too, the new Red Flag Rules which went into affect November 1st by the FTC covers various privacy issues regarding client information. Zillow will have access to tapped conversations with any clients we talk to. This for a fact is a clear violation of the Red Flag Rules as privacy is thrown out the window.
Besides all the clear violations that appear to be seeping from this new process, we staunch supporters of Zillow feel like we have been slapped in the face after helping to make Zillow what it is today.
One key point, Realtors and those lenders who are not "Confirmed Lenders" still have all of their contact information in tact on their profiles.
Gee, am I missing something here. So unless I front the $ 250 for potential future charges for contact, I am SOL for all the guidance and support I have given to Zillow and customers over the past years.
As Realtors, are you the next in line to be taken advantage of by Zillow? What's in store for you?
To read some of the posts in today's mortgage section, go to this link:
This week was not unlike many with rates initially edging up this week over economic news and comments from various politicians on Capital Hill regarding spending plans for the country.
Today's weaker economic news sent Bond yields lower with many lenders reporting rate changes to the better several times. One of my lenders improved rates four times today alone.
Conforming fixed rates ended the day at 4.50% with an APR of 4.665%.
Conforming Jumbo here in San Diego ended at 4.75% with an APR of 4.873%.
Clearly the rates this week ended up better than they started earlier in the week. Two key market segments had alot to do with today's improvements. First was a report on week consumer spending and confidence. The second, was news on new job worries. Both can be detailed at the link below to Bloomberg:
Advice for next week is to watch closely. Good time to suggest to your clients who are buying to lock in their rates while they are still at semi-historic lows.
At first glance, some of you may be asking yourself, why is he directing this at me?
A while back, I wrote about the upcoming Red Flags Rule proposed by the FTC which has been placed on hold two or three times this year. The day of reckoning has come with the rule becoming effective on November 1st of this year.
Within the confines of the legislation, it is somewhat ambiguous to some industries whether they are covered by this new legislation. Obvious businesses include financial institutions, mortgage brokers and such. Within the pages of guidelines and requirements, it mentions that real estate agents can also fall under this category.
The Red Flag Rule's key ingredient is " Identity Fraud ", and it's purpose is to have those businesses that are affected comply with certain requirements to safeguard their clients personal information. Because of the broad definitions, Realtors could and will be effected by this new ruling.
Fines for non-compliance are steep with some cases potentially open to license revocation.
While you may laugh, or casually dismiss this post and topic since you think it will not apply to you, all agents should approach your broker of record to see what steps they have taken to be in compliance. Your brokers failure could also come back to haunt you.
For further information about this new regulation, please visit the FTC website identified below where the Red Flags Rule is available, and tools to ensure compliance are available:
While I would rather be bringing brighter news, this new ruling will affect many of those who would never have dreamed that they fall under it's jurisdiction.
Just when I think I've seen it all during my career, I get another surprise to add to the list.
Rates have been dropping sharply over the last week with rates for some borrowers with excellent credit and equity to lock at 4.50% with an APR of 4.654% on loans up to $ 417k.
Consumers also still have an opportunity with Fannie Mae's Conforming Hign Balance loans to get very low jumbo rates ranging 4.625% with an APR of 4.769%
This temporary High Balance Conforming Limit is set to expire on December 31, 2009 unless the government and Fannie Mae along with Freddie Mac agree to extend this limit. If it expires, those in the Jumbo category will see rates spike up to previous norms where they were generally almost more than 1 % higher than the regular conforming loans at or below $ 417k.
I encourage all Realtors and prospective clients to lock in now on these historic low rates. As a Realtor, I am sure that you are helping your client navigate the loan maze out there. My recommendation is to lock with your lender as soon as you can. Rates change daily, sometimes more than once or twice a day depending on market sentiment.
Realtors...I would advise you to cousel your buyers to lock with their lender as soon as possible. Those consumers reading this blog.....I encourage you to do the same with your lender.
Best Regards,
Wayne L. Brown President Thor Funding & Investments, Inc. CA Dept. of Real Estate, Real Estate Broker Brokers License # 00906571 Corp. License # 01848367 http://www.sdmortgagefinder.com/index.htm
I've been on Active Rain here now for a while, and enjoy both reading and writing on occasion. I also participate on Zillow, FaceBook, and Linkedin.
Candidly, I think we all do this for enjoyment, as well as, to get our name out there for recognition in the hopes that one of our blogs helps someone...and just maybe a client once in a while or new business relationship.
I often tease my son that I only know enough about computers to be dangerous. Yet it seems with everything that comes before us, it can sometimes be daunting and overwhelming. Am I using the right key words and tags, proper placement, etc. More important, am I staying within the terms of agreement?........not sure about you, but they can be wordy and ambiguous too at times.
I try to research some of the pieces on SEO and such. I try to change up my website content with up to date and current relevant information.
While I appear to get some recognition......no business yet from this avenue, I have found myself wondering.........really....is this worth it? Or is it better to just go back to basics with the face to face in the field.
Just looking for some candid feedback. Thanks in advance for any insight that you might have on the subject.
I have from time to time read blogs here on AR talking about the potential for problems surrounding copyright infringements? I happened to come across an interesting article the other day that discusses the potential need for bloggers insurance. Granted the article had more to do with defamation issues and such, but it really made me stop to pause.
I blog fairly regularly here on AR and a few other select sites. While most of my posts are intended to be informative relating to the real estate industry including finance, I have on occasion expressed my views. I believe that I have always been civil and truthful. I do not shy away from responding what might be termed a strong fashion when I come across a new policy or regulation that is being proposed against our industry. On more than one occasion, I have given politicians, regardless of party,my two cents worth-especially when I feel that they are way off base.
Earlier in the year, I got a call from a Congressional staffer for a prominant Congressman whom I will not name, attacking me for writing about proposed changes affecting the lending industry. Calls like that I can handle as I always insist on getting my facts straight.
The article and subject does raise an eyebrow at least for me since I refuse to keep quiet when I feel very strongly about something affecting our livelihood. Yet, since we live in the times where some people will sue even just to make a buck, it has to make you wonder just where our society is heading to these days.
I guess it just boils down to this at least for me as I try to follow these rules when blogging.
When writing an article or blog critical of someone or something, I do my due diligence to ensure that I have my facts straight. Secondly, even when it's a politician, I try to ensure that I attack the idea or proposal rather than the individual. Sometimes that can be difficult when you can't believe what is being proposed or discussed by them in some fashion.
At least for right now, I have no intention of paying for media liability insurance.
For a review of the article presented by Bloomberg, please follow the link provided below:
Just a friendly reminder.....I know it's early, but it's never too early to put the word out when times seems to pass by so fast. Maybe, I'm just getting old, and it just seems that way.
Earlier this year, Fannie and Freddie extended the Temporary Conforming Jumbo Limits through December 31st of this year. In some cases, lenders may also impose earlier cut off times so that loans can be sold on the secondary markets.
So if you have any would be buyers sitting on the fence, or a friend or two that fit this category and might want to refinance, you might want to give them a big nudge.
I also encourage you to write your Congressman or Senator to request another extension of this feature. It has certainly helped us here in California.
Realtor Forum
Rates have taken a sharp drop this week with Conforming Rates hitting a low of 4.75% with an APR of 4.836% this week.
Despite somewhat mediocure news about the economy, Bonds have scored well for the week.
Recommendation is to Lock your rates, Encourage your L/O's to place locks for the next 30 to 34 days on your purchase transactions.
Best Regards
Wayne L. Brown
President
Thor Funding & Investments, Inc.
www.SDMortgagefinder.com
Make It a Positive Day
I'm not sure about you, but it seems every time that I turn around something new is changing in our business. For months now, we have been hearing about this and that new law or regulation taking effect.
My consultant that I use for my mortgage business pretty much scared the life out of me when she went over the " Red Flags" requirements with me in a conference call in late April. The new law was to take affect in June and then was postponed until August 1st. Now today, we get notification that it is again being delayed until November 1st of this year.
For those of you who are Realtors, I am told that this new law also affects you, so if you are not familiar with it, you should be.........or at least mention it to your company Broker.
Here is a version of the email I recieved today. Below the comment, I will have the link to the official site detailing the new law.
"To assist small businesses and other entities, the Federal Trade Commission staff will redouble its efforts to educate them about compliance with the "Red Flags" Rule and ease compliance by providing additional resources and guidance to clarify whether businesses are covered by the Rule and what they must do to comply. To give creditors and financial institutions more time to review this guidance and develop and implement written Identity Theft Prevention Programs, the FTC will further delay enforcement of the Rule until November 1, 2009."
The mortgage industry is certainly undergoing many changes to help provide homebuyers and homeowners better information when it comes to financing a home. July 30th is the day a new Federal Law takes effect which will have a large impact on when an escrow can close on a home purchase or refinance.
In 2008, the Housing and Economic Recovery Act ( HERA ) was passed by Congress, and the Federal Reserve Board published the regulations under the Truth and Lending Act. The regulations were written to provide a more transparent, level, and fair regulation of the real estate industry; to add additional steps to help prevent deceptive lending practices; and to protect the consumers by making them more informed- and therefore more confident- in their home financing choices.
In summary, HERA amends the Truth in Lending Act (TIL ), implemented through Regulation Z. It has a number of provisions including the Mortgage Disclosure Improvements Act, which changes the Truth in Lending Act requirements surrounding early and final disclosures and the timing of when fees can be charged.
Note: This law effects all purchase and refinance transactions involving 1-4 family units that are primary residents or second homes.
Below are four important areas for all consumers, Realtors, lenders, and closing agents to remember when new financing is required. It could, and most certainly will, affect the timing and closing of any transaction. Therefore, all parties involved should keep this in mind, especially when planning for purchase transaction closing dates.
•1. In the past, borrowers and sellers would agree on a closing date, and then the service providers-including lenders-would work as best they could to meet the date of closing. In the future, contracts can still be written with a specific closing date, but all parties need to take into account that the earliest any home financing transaction can close is 7 business days after the borrower is issued his or her initial mortgage disclosure from the lender. Note: Saturdays will be counted as a business day, except for Federal Holidays.
•2. Upfront fees cannot be collected by the mortgage broker or lender ( excluding credit report fee) until the initial disclosures are received by the borrower. Disclosures are considered received by the borrower 3 full business days after mailing, allowing fees to be collected on the 4th business day. Examples include appraisals, application fees, etc. This also means that the appraisal cannot be ordered until the 4th business day as well.
•3. Speaking of appraisals, the borrower must be provided with a copy of his or her appraisal a minimum of 3 business days prior to closing. The appraisal is considered received 3 business days after mailing. The borrower has a right to waive this requirement if the borrower believes the 3 business day required review is not necessary for any reason whatsoever.
•4. Lastly, an increase of more than 0.125%(1/8th) in the Annual Percentage Rate(APR) from the initial Truth in Lending Disclosure(TIL) requires the TIL disclosure to be revised and reissued to the borrower. The borrower must receive a revised TIL disclosure at least 3 business days before closing, providing the borrower with the same time required to determine if the borrower is comfortable with his or her loan choice. The TIL disclosure is considered received 3 business days after mailing.
Considering all the things that could come up or change, or finalized throughout the course of the transaction, there are a number of things that can affect the APR. Consequently, it is critical on the front end to ensure that estimated fees are as accurate as possible.
This will be even more important for the lender/broker on purchase transactions. In most cases, the Title and Escrow companies are not normally selected by the lender. Personally, I have often called escrow and title to get fees, and later to have changes or miscellaneous fees added by one or both which slightly affected the costs. Now with this change, it will become even more critical for us lenders to be as detailed as possible.
Some lenders have even come out and recommended we brokers over quote all fees. This might at first appear to be the right thing to do given the changes taking place on July 30th, but for cost conscious buyers, we lenders could over quote, and then appear to be more expensive than another competing lender.
Things at least for the immediate future are going to get a little dicey when competing for business. The best suggestion that I can offer is for all parties involved to communicate as best as possible, and to plan well ahead to avoid shortfalls. Many are recommending 45 day escrows vs. the 30 day escrows of the past with the ability to close early.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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