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 count detail. 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:
http://www.zillow.com/advice-thread/Zillow-Mortgage-Marketplace-Pricing-Policy-Change/294764/
What say you?
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