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Zillow Mortgage Marketplace & Lending Tree -- Online Lead Generators - What does it all mean?

confusion

LEAD GENERATORS -- Definition from Mimi.hu -- The process of collecting contact information and extracting potential sales leads. The process of finding people (consumer or business) with a qualified interest in a certain product or service.

Jeff Belonger's definition of lead generators. Risky, sometimes false hope, misleading, low ball rates and or closing costs, bait & switch.

Spencer Rascoff wrote this post, Zillow Mortgage Marketplace Launches: FREE MORTGAGE LEADS. I am not here to knock Zillow and what they are trying to accomplish. I am here to help the average consumer understand how these lead generators work and the potential pitfalls. I have over 15 years of experience in the mortgage industry, and even though this is my opinion, I want people to realize what they might be getting themselves into.

I have many concerns, especially more than ever, because of how much the market has changed and so has getting approved for a mortgage. Lending Tree is a well-known lead generator. I know many lenders that have used this service and typically, the loan officer has baited the consumer with a low rate to capture their interest. I tried Lending Tree for 2 months. Most clients that I spoke to were offered much lower rates than I could offer. Yikes, and I get the money from the same place as all other mortgage companies. I have spoken to many consumers that have used these online sites and many have had bad experiences.

concerns

So, what concerns and issues do I have with these online services? You can't interview the client before giving a rate quote. I physically need to speak to that specific consumer to gather more than just a fico/credit score. With conventional mortgages becoming stricter with their approval standards and guidelines, it really leaves FHA mortgages as the last resort. And many brokers and banks aren't FHA approved or don't have a good understanding of what they are looking at. Why can I say this? I am working on my 5th client in less than 1 1/2 months that applied with a lender or two, who told them that they could get them approved with a FHA mortgage. I have closed 3 of these to date and I working with the other 2, which both should be closing soon.

How do these lead generators, online services work? They ask you, the consumer, to fill out a quick mini application. Several main questions would be :

What is your credit score or the range of your credit score.

What is your annual income.

What is the house price that you would like to purchase or the range.

Why do I think that these services are not as good as advertised? You are having lenders compete against each other. Many of these loan officers won't be experienced in all types of mortgages and many will just be good sales people. Telling you what you want to hear to get you into the door so they can take your application. The bigger problems?

Credit.... not just the credit score. I need to know how many lates that you have. When your last late was and to as why. Did you have a Ch. 7 bankruptcy just 2 years ago?
Income... Your debt to income ratios. If you just started working for a company less than a year ago and you also get a bonus, 9 out of 10 times, I probably won't be able to use that bonus. I need a lot more job history information to determine what I can use.
Goals.... are you planning on being there for 2 years? 5 years? Do you need the lowest payment now than later?
Assets.... do you have more than what would be required, which would be called reserves. Are you getting 100% of the monies gifted to you? FHA loans are the only program that allow for 100% gift unless you are putting more than 20% down, which is usually not the case.
Declining market values.... if you don't know where they are buying, this could be an issue. On conventional mortgages, you are automatically penalized 5%. On FHA cash-out refinances, there are new guidelines for this.

Here is a consumer that commented on Spencer's blog.

" When I went to buy my house, I started on LendingTree.com, and I instantly hated the experience, non-stop calls, not one rate was accurate compared to the web site. I had to start answering the phone with "If you are not prepared to honor your rate you claim on the site, I am not interested" everyone hung up... finally someone owned up to saying, those are teaser rates everyone does it, and no one plans to honor them."

Overall, many mortgages can't be approved with a click of a button. You need a person, someone that understands mortgages, FHA mortgages, and how mortgages work. Not just a rate based on your credit score and how much money you make. A lot of this takes at least 20 minutes when speaking to a consumer. It can't be done with a quick e-mail or just quoting a rate. In my opinion, just another time bomb for the consumer when shopping for a lender. I see these lead generators being more of a problem, than making the purchase or refinance transaction a pleasurable experience. Again, just my .02, but I have tried these before. My answer, you need a true mortgage professional. Possibly a referral from a friend or family member. If you seek someone online, do your research.

What do you say? Your experience as a consumer? As a loan officer?

Update to this : 12:48 pm

We know that the market can change drastically in a two day period... this is another out for a loan officer to quote a great rate, in which this loan officer can change it two days later and blame it on the market. I just refuse to play in this arena and play these games. I want my clients to come to me because of my knowledge, that they trust me, and because I can think outside the box quicker than many. Not because I quoted them the best rate, which anyone can do....

Update : 4/8/08 8 am For more discussion and insight, Jeff Corbett wrote :Zillows Mortgage Community, On The Cusp of an Anonymous Transparent Credit and Personal Information eXchange Between Mortgage Professionals and Consumer, to Create a Highly Trusted Mortgage Transaction Community

As much as Jeff and I don't always see eye to eye on the transparency issues, he hits a home run in regards to Zillow and the advertisers that they can attract from this lead generator. Zillow will get a lot more hits from this site now.

Update : 4/10/08 This was written by Rich Sweum : Wacky Zillow Quotes #1 and #2 This is exactly what I am talking about. These rates with these fees and points don't exist in the real world of mortgages. SAD and pathetic. And because this site is free to lenders and loan officers, you will see a lot more of this. Just my opinion, but you watch and see.

Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 04/05/2008 02:10 PM

Comments (59)

mortgages, fha mortgages, zillow mortgage marketplace, lending tree, lead generators, false hope

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: Zillow Mortgage Marketplace & Lending Tree -- Online Lead Generators - What does it all mean?

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59 Comments on Zillow Mortgage Marketplace & Lending Tree -- Online Lead Generators - What does it all mean?

APR

2008

Excellent Points Jeff - When we see online approvals or lenders as such and know in fact that a buyer has not met in person to share confidential financial info with a local ( licensed to do business in IN )reputable lender (and has been provided a TIL) - we encourage our sellers to counter the offer or accept another one - best price is no longer the best deal - getting to a successful funded closing these days is just as an important factor to weigh in negotiations - times have changed :)

Great Post

Sincerely,

Grace

I have similar concerns about people who sign up for home gain and the like. They seem to think that they are getting a preferred list of agents, not just agents who are desperate enough to agree to work for practically nothing. Consumers are confusing competition with quality! The agent that is willing to work for less has to make up for the short-fall in volume. They can't put out as much effort. These consumers think they are being "smart" because they can shop commissions by creating competition using a lead generator sites. However, what they don't know is that the top agents who offer the best service and have years of experience don't sign up because they don't need to. Also, in some cases, I can reduce my commission, but its on a case-by-case basis. A home in great condition, properly priced that will sell quickly is a home that I might be willing to negotiate a bit on. A home with serious issues that is overpriced is another matter.

GRACE..... I totally agree except for one thing.... they don't have to meet face to face. 70% of my business now is out of state. I can be just as good and successful as the lender next door. Better yet, I just got a client last night that went to the lender in town and it's been headaches. He missed the settlement date and I am now taking over. I have another client that went with his realtors suggestion, who came highly recommended and he hasn't delivered as of yet and settlement is 2 weeks away. I maxed out his qualifying ratios, after going over it with one of my underwriters. He is using a true broker that has sent this to a lender to approve the loan and it's now been 10 days in underwriting... we are dealing with high ratios, which just because I said I could do it, doesn't mean everyone can do it. He originally went to Countrywide who approved him $12,000 less than what I could do.

I do understand your statements, but I think too much emphasis is placed on where the lender is located. It can go both ways and has been proven as such. Especially now more than ever, when dealing with a broker that has to rely on someone else's underwriter.

In any case, we are in agreement, that the best deal on paper is not always the case. You need someone that will study the scenario, have all the pieces to the puzzle, and will be honest and upfront. You won't get this in a 2 minute e-mail with a rate quote... sorry, Zillow, you just won't. And thanks for the polite compliment.

RUTHMARIE..... I don't know much about Home Gain, but I would agree.... you just don't get the same service upfront. And you hit the nail on the head when you said... "consumers are confusing competition with quality" Thanks for your feedback.

Sorry Jeff Darlin'. You miss the point of the lead generation sites completely.

It's to sell advertising. Accuracy of quotes for mortgage loans is no more a concern for them than quality qualified buyers and sellers that they sell to real estate agents.

The biggest problem is that they ARE good advertising mediums and they DO generate a lot of Google traffic and they ARE right smack in between the consumer and the service providers that have the help they need.

The consumer believes that they have been empowered. They have not. They are simply a commodity for the lead generation machines to sell to real estate folks and mortgage folks and once the site establishes traffic and rank a source of advertising money.

I am in full agreement with what you are saying. I have gone to the closing table with clients who are promised one rate on the Internet...and the contract rate is much higher...what does the buyer do at closing...say no? What house will they move into if they do say no?

I did zign up with zillow. I am not sure what to expect out of them, but if I get just one deal that is good for me. I am not speding all day on there, just testing the market

LENN..... darlin? oh Lenn.... ;o) Seriously, I don't miss the point. This post was long enough to mention why these lead generators exist. You are correct in your statement. What I wanted the consumer to know was that now more than ever, you just can't ask someone for a rate, even if you know your credit score. There is a lot more to it than that. It's false security in my opinion.

But yes, lead generators are to sell advertising.... and for google searches, hence why Zillow is very cheap with this set up. And so many are jumping on the opportunity because of it's price. In any case, you do make some great points and thanks for your feedback.

TEAM DiMURIA..... but don't mistaken things found on the internet to be evil. I blog online, on the internet. Does that mean the same? You could still be a good loan officer or realtor that is part of that lead generator, but I think it's rare. As I mentioned, I need at least 20 minutes on the phone, in order to quote a rate. There is too much to ask, in order to be accurate in my decision.

DAVE.... well, good luck with it.... In all honesty, I don't care how cheap it is... I don't care if I did get one lead from it. I am not going to compete against false quotes. I read from one person that they have been happy with the amount of leads in a timely manner.... and this person is very experienced... I just think you could do so much better in building relationships and blogging. I have done the numbers thing before... yes, I still made some money, but it was a lot more work. I could use that time and effort to better my business plan and to blog more quality stuff. Again, just my .02.

Jeff,

You are right with not being able to give a client an honest quote with so little information. I started out my career decissioning Lending Tree leads and hated it. While I got a lot of experience writing loan applications the bottom line was I couldn't compete with the local lenders. I also new I did not want to build a career around calling leads. I to believe it is far better for a client ot receive a referral, as that is how I prefer to do business.

I did sign up with Zillow this week to see if it is any better than what I experienced with Lending Tree. The concept of transparent competition intrigues me. I am not greedy and try to look out for my client. In hopes of a referral. Check out my blog in a few weeks. I will let you know what I think of Zillow and if it is an improvement over Lending Tree.

you hit it right on the nose...only been on a few days and notice its like a lending tree clone, the consumers wont get the best deal out there, they will get the biggest liar out there and suddenly will get the bait and switch at closing table..oops did I quote 4% on the site? well its 7.25% now sorry just sign here..have a nice day. I tried voicing my opinion about this and all I got was oh well this is is the system and it will not be changed.

It is really hard to guage the customer and the situation from a few short questions and answers. We shall see how this turns out like you said.

Shoot, I just lost my comment. I have to start again, I'll try and make it brief.

Darling Jeff- I entered into Zillow once the Mortgage Stuff broke out, pretty much right away. I've probably made over 50 quotes to inquiries and will make at least 200 more...

Our viewpoint on Lead Generators isn't all that different. While I was never a part of the entity you mention in this post, I understand the system...at least I hope. Here's how I quote...mine is reality (my lowest wholesale rate) and volume based. I build in an earning for me of course, yet I price things with a Volume-Based mentality. The criteria given to me is decent and I make my quote assuming there is a large level of truth to it and no other factors (job history inconsistencies, credit file scars & history itself, seasoning of property, etc.) are on the horizon. I won't make a lot on any one, but I'll make a large number of loans if the system is tuned and I'm doing my job. Volume = Key to any business, I'm working on that. I prefer Referral Business much more, yet I'll give it I'm giving it a shot (This Zillow thing). Time shall tell on all accounts. You make a good point here though, the nature of this animal has lots of pitfalls. There's that proverbial bait & switch if things on either side aren't in the up and up, bait & switch works both ways. I'm just looking for another avenue that narrows that possibility down...

Hi Jeff...I agree with nearly everything you and others have said. Let me share a couple of things

1. They might just be good salespeople. I make my living as a good salesperson. A good salesperson is able to sell with honesty, integrity and compassion. You are a good salesperson. The liars are bad salespeople. Let's be careful how we define sales for the consumer.

2. Lenders who lie about quotes. It appears that Zillow is trying to attack this through an eBay-like ratings system. I don't know if it will succeed, but it looks like the guys who don't give good quotes will get bad ratings and, voila, everybody knows it.

3. Details. You're right that credit score, etc is simply not enough. But even in real life I get folks who want to know some quick answers. I might give them some...with the caveat that we really need to talk in depth for the right answers. You can give this caveat online with Zillow in your comments.

Granted, it's just started. But if I close a couple deals next month because I'm on the ground floor with a well-visited website, it's worth a little bit of my time. Let's see how it turns out.

UPDATE in my opinion..... . It just wanted to add this. My problem with this is that many loan officers will know the basic loophole. That they are given a credit score from the borrower so that loan officer could give a very low rate, knowing that it can't be verified until they pull their own credit. Has anyone ever heard a client tell you that their loan officer came back to them later and changed the rate because the credit score went from 590 to 589??? This type of sale will be used even more with these lead generators.

JIMMY.... hey, signing up for Zillow looks to be the way for so many to try. I can see why they made it so cheaply, to get a lot of people to sign up and test it.... to sink their teeth into it. But as Lenn mentioned, it's just another way for them to generate advertising monies.

In regards to starting off with Lending Tree? And now with Zillow.... and you stated that you are intrigued by transparent competition. Do you think these lead generators offer transparent competition?

JUSTIN...... I felt weird talking about it without trying it. But from reading Spencer's post, it is set up just like most lead generators. The client lets you know if they accept your offer. Accepting an offer just based on a few things that a client fills out? Just not my way of how to do business.

NAOMA...... I 110% agree, which leads me to the reason why I decided to write this. As I mentioned, I need a lot more than just a credit score. The face of the credit is so important.... And read my update in my opinion, which is listed above.

JASON..... I do agree with trying new avenues. You never know until you try. But.... in all honesty, even if it brought me another deal or two a month, I am not interested, even at that low introductory price. I know the value of the quotes and I just won't give a blind quote to someone that I have not spoken to in detail.

I am not one to say no to new business. But I could just start off with a lower rate than everyone and then blame it on the fico score, that their DTI is to high... I have been doing this too long to really BS most consumers. And I just won't allow myself to compete against others like this. I would rather blog away, get people to get to know me, who I am. This is the true value in sales... at least this is what I am sticking with. I think if you are good enough, you will get some business, but I am just to honest and to the point. I hardly got business, because I didn't offer a low rate. I had some people beat me out by a 1/2 percent... there are no true rules to this. It's a free for all....well, it could be.

JOEY..... okay, so you got me there, on the sales people thingy. But this is how you look at it, I don't consider myself a sales person, even though we are in sales. I have had some clients tell me, after asking them why they chose me, because I didn't sound like a sales person. So, I will stick with my comment. There are some damn good sales people, better than me... because they sell. Selling someone on an idea of their mortgage has no value, if they leave out the specifics. If you don't educate the consumer on the process, I think you aren't doing your job. Again, I think you can be a very good sales person, but not good at mortgages. Selling.. selling the rate and promises... to me, that's sales.

A rating system? I have seen this abused and misused. Again, a good sales person can blame mishaps on other people or things. I have heard some good replies to people that were delayed in their mortgages or that couldn't close. Some of what the loan officer blamed it on... pathetic. So, if they are that good at lying, are they going to get a bad or good rating? I would beg to differ that some ratings will not be accurate. You can game the system if you think about it... again, just my opinion, but if I am a good sales person, I could make most people think that a loan not closing or a higher rate was due to something else, other than myself.

Overall, read my comment to Jason, about the extra couple deals a month. And read this comment. 04/05/2008 05:10 PM

Jeff,

Jason Williams posted a blog on Zillow bug and improvements. He raised the question of should Zillow lender thoughts be made public or left private between borrower and lender. Sara's response is by the quote and comments being open will force lenders to give a honest attempt at a quote. Lenders know it is impossible to give a quote without all the appropriate information. So, I believe this is as transparent as we will see competition.

But, the real thing that excites me is the grading system. I truly believe if you do right by the client it will always benefit you in the end. Once you submit a quote it is out there in the public. Kind of like our blogs. People will be able to judge you by what you write. I don't know exactly how the quote process will work at Zillow, but I still want to test the waters. I have decided to enter this internet world and Zillow is another avenue to generate loans.

Jeff--- I agree with you wholeheartedly about lead generation systems, paid leads, LendingTree, and the like in the past but this Zillow idea and the research I have done on it so far just feels a bit different to me.

Even the info provided by the borrower is much more detailed than you would find in most lead systems. I have always been volume-based, so I have signed up and will be giving it a shot like Sardi above.

Like you said, "you never know until you try."

Hi Jeff - I'm glad to read your take on this, from a lender's perspective. I know what I think about online lenders, like the one your mentioned and a few others. Total junk from my experience with buyers who got hooked up with them. Bait and switch is the tip of the iceberg, from what I saw and from what I had to sometimes clean up by getting a new lender involved.

I will reserve judgement on this one until I either have first hand experience or until I see enough of you whom I respect give it real thumbs up after you've had experiences with them. I don't like that they sell all potential buyers' info, but at least they disclose that right up front.

Ann

More stuff that I wanted to add...

Richard Barton, CEO of Zillow said this....

"They also tell us that they want their personal contact information to remain private and that they want to see real rates that are accessible to them, not “teaser” rates that don’t reflect reality. They would also like to shop across their options and be able to do an apples-to-apples comparison of loan quotes from multiple lenders in a standard format."

I am sorry, but you can't compare apples to apples without talking to the client when it comes to credit issues, and just not getting a credit score. And what about fees? I could charge a 5% fixed rate, but my fees are going to be $5,000 with points.

And then this was written....

http://blownmortgage.com/2008/04/02/zillow-mortgage-launches-how-do-you-rate/

And this was taken from the link above.....

"In addition to the consumer getting multiple, anonymous offers the originators who are submitting the offer can see all of the other offers that the consumer has received and who has submitted those offers. This is a great tool for originators to use as market intelligence - they now know who and what they are selling against."

Okay.... lol So, I wait around for a day, watch the other offers from the other lenders and then come in last minute and offer about a 1/4% below everyone.... KNOWING that if the credit score is a tad less than what they told me, that this would be my out... or if they have some lates that could affect the rate....

Sorry, there are just so many unknowns.... you are basically allowing the consumer to walk blindly in the dark, thinking that they are going to get honest feedback. This is sales... and many loan officers will take advantage of this platform knowing that they can be a little lower and use the credit, income, and monthly debt as their scapegoat. I don't care what you tell me, I am not convinced that this will be very good for the consumer. And the rating part of it? Rating the loan officer... again, I could make most consumers feel warm and fuzzy if I didn't honor my quote, and use many different excuses to as why I couldn't. It's even easier now than before, because guidelines are more stricter.... and reading much of what the people behind Zillow have written, they are hard selling this, making it sound like it's easy with no holes. I can see right through it, which shows me that this is all about sales and profit for Zillow, not the consumer... just like Lending Tree.

So much is being discussed about this recently...well it will be something to see how this works with Zillow...thanks for sharing!

Jeff - Overall, I can't speak to how Zillow's lead generation will compare to Lending Tree, but I have had MANY clients dissatisfied with Lending Tree, ever since it first launched. I usually try to heavily discourage the use of that particular site, and online/unknown lenders in general as an offshoot of that. I am simply tired of having deals delayed and on occasion lost altogether because of the incompetence of the "assigned" lender. I hope for Zillow's sake that it doesn't wander down the same path.

JIMMY..... I read this and comment separately, right above this comment. I truly think the rating system can be abused and gamed. Knowing myself, if I wanted to, I could feed a bunch of BS to a consumer to make it look like the delay of their mortgage, a higher rate, etc etc., was due to several different factors. The main one, the change of their credit scores... other things, debt to income ratio changes, etc etc..

So.... their experience might not be the best at times, but I could make them not rate me lower than they should. And I know a lot of people that don't take the time to rate or do customer service surveys and such... hence why I think so many will fall through the cracks, and this is from my experiences.

AARON..... anyone can make anything feel better than something else. I read the two blog posts on Zillow's web page and if I wasn't in the mortgage business or new much about this, it would sound like they had a great thing.

But in all honesty, until I see their credit report, know their true credit history's and such.... this is still a shot in the dark. Especially when credit scores change when we pull credit.

I know there is no perfect system, but how I look at this, there are some big holes that will allow loan officers to abuse this set up. It's just that basic. I think too many people are staying positive on this, because they have limited resources and this could be another way. But if you have done these lead generator platforms before, yes, some are better than others. But it all comes down to one main thing.... making the client feeling good with a very good rate. Most of us know that many go out on the street with rate sheets and rates are at least a 1/4% lower.... we know that the market can change drastically in a two day period... this is another out for a loan officer to quote a great rate, in which he can change it two days later and blame it on the market. I just refuse to play in this arena and play these games. Yes, I will get a few deals, but I will use my time wisely.

ANN..... yes, I should reserve some judgment, but I have added to this now. And from my experience, there are just too many loop holes, for any loan officer to put blame when they can't give them that rate quote. I just can't believe that there are so many loan officers buying into this. There are just no way to put in place bullet proof stops, to make this a pure platform that will help most stay honest and real. Especially in this market... Read this comment by Justin Williams who already has a negative experience... 04/05/2008 03:50 PM

TOM D. ..... yes, we should be hearing more feedback in the next few weeks. I just wonder how many won't be honest, so not to hurt feelings or to sound negative. I want honest feedback, such as what Justin Williams mentioned.... 04/05/2008 03:50 PM

APR

2008

I have made a business decision to not pay lead generators. I do not see them providing value to us or the clients. I would rather spend the money generating my own leads and not feed these companies.

You are so right with the bait and switch. I can't match some of those rates. I have heard bad stories to. You do have to know the scenario, credit scores in this market. There are different rates for a 600 and 700 credit score cashout. Rural lending etc

Oh boy! A rating system. If there is a rating system that would have any meaning, and I don't believe there could be, it would disclose the closing rate/quote rate/APR to the public. Who could track that?

As it is, the consumer rates based on the rate they are "quoted" when they get the guote??? I believe rating systems are a gimmic to get subscriber/consumer participation and are, not only worthless, but could actually present a very false picture of the actual value of one mortgage entity over another. Rating systems are one of the most easily manipulated systems on the Internet.

But, if it gets subscribers/backlinks/synergy, it will place high in SERP and sell more advertising space.

Jeff - In a world where our existence is dependent on catching mice, only those that catch the mice will survive. I have read here and other blogs about the "obvious" short comings of agents that use the referral/lead generation systems. I have used HouseValues, HouseHunt, Assured Marketing (kiss that $1200 good bye) MLSonline, MLSlistingsonline,Home Gain and several other lead generation companies.

I don't think that anyone I have dealt with would ever state that they got less than complete, full service from me. I don't think my use of any of those companies has any correlation to the quality that I offer. I don't think that the fact that I offer a rebate to both buyers and sellers reduces the quality of service that they receive.

I also receive referrals from the in-house programs at my Broker. I receive referrals from other agents. I receive referrals from friends, relatives and other clients.

I believe in having as many mouse traps out there as possible. I can not always control the scent of the cheese, but I have every control over the actual fromage I offer.

I work each lead the same way initially. I only want to separate the live from the dead and the serious from the curious. Some sources have already qualified them, I have to present what I offer and determine if the prospect is a good fit for me. They can decide on me for themselves.

There is nothing included with any referral or lead that suggests that I have to work with them. There is nothing promised that I did not agree to from the very beginning.

All of these companies understand the hunger prospects have for information. They understand that most of these people go to the internet for the information. They all promise a great deal of sizzle, it is the duty of the recipient to determine the size and quality of the steak.

The use of these systems is not an indicator of either the consumer (of their true intent) nor the practitioner (or their ability to perform). They are just mousetraps. If you truly want to surpass them in attracting possible clients, you need only build a better mousetrap.

Apparently, building a better mousetrap requires a complete understanding of the workings of search engines and having adequate funds and knowledge to move up the list. Those that do not have the funds or knowledge have no choice but to play on the field the lead generation companies provide.

Consumers will always be operating under the principle of "caveat emptor" on the internet. To castigate the lead companies in hopes of having a consumer say "eureka" is possibly a worthwhile cause but even Don Quiote realized the folly of impossible dreams.

Just thought I would shake out some loose change and offer my opinion.

As a Realtor, we hate, absolutely hate to get pre-appoval letters from on-line lenders. We always ask our buyers to get at least qualified through one of our own, just for our knowledge of their true financial situation. We had one guy qualified through 3 online lenders and none came through? Why?

He has collections, bankruptcy etc... which he did not tell them about. So when our lender qualified him she was able to tell us that.

Hopefully it works for some good lenders here in the rain, but this is from a Realtors perspective.

Great points...these businesses will have to change their ways in the future if they want to thrive. Consumers still have not figured out the inherent downfalls of having aggressive competition for their business. Competition is good right? Not if it involves lying to get the deal. Instead of going to a lender that can't generate their own business, repeat business, and referral business...buyers can go to a lender who has to buy leads. Bad news.

Hi, it's DavidG from Zillow.com,

@Jeff -

Please check out the marketplace and let me know what you think. Almost all of the data points you've listed in your article are included in the detailed quote request. The only one that I think isn't in the quote request is the number of lates - I'll pass that feedback on to our product team. Borrowers and lenders can and are communicating via the notes sections or requests and quotes. Many borrowers are using the default option to let lenders know that they're "not sure" about what loan they need which allows mortgage planners to recommend the best solution - and possibly submit multiple quotes for different loan types.

@Ann -

Brian Brady closed on his first Zillow loan yesterday. Does that count? ;-)

@Jeff and Grace -

Agreed. Loan quotes on Zillow are used to decide which lender to work with. Borrowers have to contact lenders to get a GFE, pre-approval etc.

@Ruthmarie -

You raise a few great points about quality and time will tell how the market forces in Zillow Mortgage Marketplace creates an incentive for (and reward) good service. But I think there are a few things that should help;

Because the sales process begins with a quote, all the emphasis is removed from shmoozing a client and placed on after sales service.
The reputation system for lenders on Zillow is a review of the lenders service quality, not the strength of their quote.
Because all mortgage quotes are transparent, have the same layout, can be sorted side-by-side and include all costs, a good quality quote should be a lot easier to identify than ever before.

We'll have to see.

@Jason -

We heard the same thing and some borrowers told us that they literally wanted to change their phone numbers after using online lead gen sites. That's why loan requests on Zillow are anonymous. We've put borrowers in complete control of choosing the lender they work with. On Zillow, buyers contact lenders.

@Randy -

No problem, these leads are free. ;-) Seriously, "lead" probably doesn't do justice to the marketplace - we don't sell consumer's contact details and borrowers contact lenders (not the other way round.) Consumers who contact lenders on Zillow are more likely to work with them because they've already compared detailed quotes from multiple lenders and have researched the lender's reputation. "warm lead" is probably a better description.

@John -

Well put. Online marketing doesn't imply poor service and often the opposite is true. That said, borrowers did tell us that they are sick of having their contact details sold by websites. They want to take control of selecting a lender like they do off-line and increasingly online (via social media marketing on brokers' blogs etc.) So Zillow Mortgage Marketplace lets the borrower decide who they work with.

@Homefinders -

Borrowers on Zillow are only allowed to rate lenders they contact and are asked not to rate lenders on the strength of their quote alone. Borrowers are asked 2 questions; "Would you recommend this lender to a friend?" and "Did you close your loan with this lender?" - they are also asked for a comment. It's going to take a little while to build a critical mass of ratings and we'll make adjustments if necessary but so far so good. Also - should have mentioned - lenders can respond to their reviews.

@Missy -

Quotes from the Mortgage Marketplace are not pre-approvals, they're custom loan quotes. Think of it as "shopping around" for a mortgage before contacting one of the lenders that quote you and who you want to work with and getting a GFE/pre-approval etc. from them offline. To give you an idea of how this works; this looks like the first loan request in Ann Arbor - 30yr fixed - it has one 5.75% quote so far (only $800 lender fees due at closing.)

JASON C. .... good point here. I am not saying that Zillow will walk down the same path, but no matter how many "safety" precautions you put in to keep things from happening as they did with such companies as Lending Tree, they will still happen. And I think more than what Zillow expects. Why? I read Lenn Harley's second comment and she is right on again. Rating systems are over-rated. All it does is give the consumer some sort of security, thinking that they will be treat fairly on all transactions. I have a major problem with that tactic, because they should know damn well that this won't happen... YET... they advertise their site as it is fool proof per se. Isn't that misleading, the same that I am talking about. Lending Tree did the same thing, they had a rating system... and they still have a very, very bad reputation.

RANDY.... I agree... and I have tried some of these in the past. I will disagree with the fact that they don't provide value to the consumer. If you, or I, or a few others handled them, I know we could proved the value. But not everyone is the same as you, myself, Lenn, and so many others. I know, we don't live in a perfect world. But I just hate on how Zillow is advertising this to the public. It sounds like it's the next best thing to sliced bread... and I disagree, no matter how many "stops" that they put into this.

RUSS.... yes, there are different rates for a 600 and a 700 credit score. And it even gets worse once you get below 600 and 580. Not every lender can even do those types of loans anymore. I know this for a fact because I keep in touch with many of them across the US. Again, yes, nothing can ever be perfect... but I guess I hate those advertise, making the consumer feel warm and fuzzy, yet there are some major loopholes.

LENN.... no darlin' this time? ;o( Seriously, again, you hit the nail on the head. It's rare when you jump into one of my blogs and comment, but when you do, you bring so much value to your comments and we normally seem to agree. I guess years of experience can attribute to this.

In any case, in regards to your comment. First off, yes, who is tracking this and how is it done. Secondly, you made this comment.....

"I believe rating systems are a gimmic to get subscriber/consumer participation and are, not only worthless, but could actually present a very false picture of the actual value of one mortgage entity over another. Rating systems are one of the most easily manipulated systems on the Internet."

Bingo... ... I think that comment is so dead on and I agree with it. I think rating systems can be manipulated as I mentioned in a few of my comments above. Gee, didn't Active Rain once have a rating system? It was abused and manipulated. And it can be gamed.... Just as I mentioned in my comment to Jason Crouch... please read my reply to him. I have mentioned, because of my knowledge in the mortgage industry and because I could woo consumers, I could still semi bait and switch and it wouldn't affect my ratings.... that I could guarantee. But I wish not to play on that playground. I don't want to undermine myself and the consumer.

JOHN M. ..... I totally agree with your comment... I think you felt that I was attacking everyone that participates on these lead generators. If you read many of my comments or replies, there are some good people that would basically hold this to a higher standard, such as yourself. Keeping it real and being honest with the consumer. My whole point was that not everyone will play by the same rules. And how Zillow and so many other lead generating companies have advertised, they are giving false hope to each and every consumer. Example... the rating system such as Lenn Harley had mentioned. This can and will be abused, no matter how many checks and balances are in place.

Overall, I do appreciate your feedback.... and yes, there are some good people out there that would bring value and do good for the consumer. But I am not going to compete against that, when I can better control my clients, when they come to me for help through my blogs or referrals... I can add much better value and my energy/effort to them this way. thanks

MISSY..... I know you do... but wouldn't I be considered an online lender, since I am blogging? That I can do multiple states? Just a question.... I am sure many could view this differently.

But yes, you need to dig deep into their credit.... which you just can't do at first with many of these lead generators... I know with Lending Tree, I could pull someone's credit at first, before talking to them or quoting them, if they gave me their social security number. But then you would have too many doing the same... and the first one that gets to pull it, will have the best credit score... possibly able to offer something better than I could, because my credit report for that consumer would be worse, hence my rate quote would be worse. And what happens if I would have given that consumer the best deal and the best service though?

Jeff. I haven't comment out of a lack of interest, I haven't commented because I couldn't.

I have not subscribed to your blog for some time because there was a glitch in the system whereby when I opened it my system froze for about 10 minutes and then I would get an error message and then be able to comment. I have had the same experience with two other Rainers. It occurs when the blog owner posts an article that gets a high number of comments.

Your system appears to have cleared up so I can again comment. I'll subscribe again as soon as the sytem will let me.

I worked recently with a mortgage broker that sounds a lot like you. It worked for me to have an advocate during the loan process. Less hassle and better information.

I regret signing up to Lending Tree...I basically offered myself up to the gods of over-bearing marketing. This was year ago, and now I know that the best thing for me is to have a relationship with a broker who tells it straight and doesn't gouge my clients...

My husband used Lending Tree when we were in Columbus. They were awful. We ended up just contacting a few we ourselves found. It was much better that way. Sometimes just because you can, doesn't mean you should!

Jeff, you seem to be claiming that you are a consumer advocate but it appears that you want whats best for the customer only on your terms. The new zillow approach is a wonderful start. To keep comparing it to lending tree is very unfair. You make is sound as if there is no way that this could work out for the consumer. Unfortunately it doesn't take an online lead generating system to have bad loan officers giving bad quotes. I have had plenty of people come to me to get a loan done after they have had a terrible experience with a loan officer all because they called the number from a telephone ad.

If you work the Zillow MM system quote it the best you can. In a case like this I quote the absolute best case scenario based on the information they give me. If things work out that the quote needs to change I am a good enough people person to let them know why and what went wrong to make the changes. It's as simple as that, people want someone who is honest and communicates with them. This is also one reason there is so much animosity in the realtor community towards loan officers.

This is a wonderful system and I think if you were to devote as much time helping Zillow find a better way to improve what they do as you spend talking about all the negative problems about these types of systems then zillow would probably have a full proof system that would really benefit the customer.

Get off your soap box, the industry has lost most of the losers and the guys that are sticking around seem to know what they are doing. We all know about the pitfalls of lending trees and the other four thousand lead generating sources. Finally someone has come up with a good way for this stuff to work, let's help them improve it.

I just don't trust getting a loan over the Internet, especially now days. I steer client's to a local source.

TONY.... hhhmmm... you make some great points.... Points...

competition is good .. yes... but having others compete for a consumers business online has proven that it can be a disaster. Not always... but there is room for it, lots of room.
companies that can't generate their own leads and need to buy the leads... WOW... bingo for the most part. Yes, I have bought leads before, as a side thing for extra business. And I still treated my clients the same, even if they were on the west coast or 400 miles south of me. Here's the problem... Many companies flourished in a good market because they spent tons of money to be a part of the these generator companies. Hence why lenders got a bad name if you were out of state... Yes, I get my business from consumers in about 8 states right now, but because they come to me. They read my blogs and trust me. In regards to lead generators... you don't get that. It's like driving through a dark tunnel with your lights out, hoping that there is light at the end of the tunnel.

So.... I think this is a great analogy and I will be writing another blog on this subject, using your insight that you have presented... thanks

DAVID from ZILLOW.... first off, I wanted to say that it was a pleasure to have met you and Sara in NYC back in January... hopefully again in July, when in San Fran.....

Let's start with this... you first linked me to this... detailed quote request I have reviewed it an I truly think you have some major loop holes. The first one is your Zillow's credit score estimator... I tried it out twice with two completely different scenarios. Both times, my scores ranged in 60 points. That is way too much of a difference to be quoting people on rates. Sorry, but it is.. and part of my point on all of this, that it gives any loan officer the ability to offer a better rate, knowing that they can use this as a scape goat. Point the finger at the system and not at themselves for giving a rate that probably wasn't going to happen, unless they had the much better score.

Let's go to the next line... income. That is too basic and generic. Here are two examples....

If someone gets bonus income, but has only been on the job for 8 months and worked in a different field previously, there is no way to use that bonus income. Same with commissions...
tips.. etc. Someone that is a waitress or waiter. This just happened to a client of mine that even gave me her wrong income from 2 years ago, because she was commissioned. Long story.

As mentioned... lates on anything can make a difference on a loan. Especially if less than a year. but even if they answered yes, I need to know why....

Then you go on to share with me an example... if you go to the bottom, it will show to lenders and their quotes. this is what it looked like...

30 year Fixed
6.0% / 6.125% APR
$1,586 Monthly
$1,408 Lender Fees

So, my question to you then.... does the lender show both the rate and APR? The lender fees... is fees to include points? Total everything? To me, this is very vague. Secondly, the APR will not come out to that whole 1/8 of a percent. That is inaccurate. I wrote a post about APR vs Rate.

Now, I did some checking on the last link that you supplied me... I found two loan officers that gave quotes... here is part of my argument...

Quote # 1

30 year Fixed
5.875% / 5.875% APR
$1,902 Monthly
$0 Lender Fees

Quote # 2

30 year Fixed
5.875% / 6.0% APR
$1,902 Monthly
$4,556 Lender Fees

Okay... quote 1... it's impossible to have the exact same rate and APR... APR is calculated with more than just lender fees. APR is but not always suppose to cover daily interest, closing fees, etc etc... so, just saying lender fees being at zero and your APR is the same as the fixed rate... wrong.

The 2nd quote? That much in fees and your APR would be much higher.

Those are two good examples of quotes that are false and inaccurate.

David,,, I would love to talk to you further... I sent you an e-mail. But it seems like I would be giving you too many things to think about, because of this discussion, in making something better. But where would I stand.

In regards to your comment about Brian Brady already closing one of these? Didn't this just roll out? Did the client contact him and closed the deal in 10 days?

Overall... Brian is a great guy.... but these things will be a hit or miss. Both on good to excellent credit and even more so on the average to below average credit. This is where you will see the biggest problems. Credit scores below 680 with less than 20% down. And those lenders that aren't FHA approved, but giving quotes out to these types of borrowers, in my opinion, the borrower won't get the best deal out there. Maybe the best from the lender, but not the best on the street. People can debate this with me all day, but the proof is in my examples...

Here is a 10% down with a 620 credit score example... FHA mortgages vs Conventional mortgages.... which is better?

Here is a 3% down with a 620 credit score... FHA mortgages vs conventional mortgages -- 3% down comparision

Most people can quote a 700 score with 20% down... not all can handle the rest, especially when it comes to FHA... I am dealing with my 3rd client in as little as 1 month, that was promised a FHA mortgage from another lender. I closed 1... have one in processing, and taking the other application tomorrow.

In any case, don't hesitate to call me on my cell... 609-440-5133 And thanks for your feedback and for stopping by.

LENN.... hey, no sweat... all I was trying to say was that I enjoy your comments, because you are like myself... no fear. Even if you respect someone, you will either say what's on your mind, the truth, or your opinion... even if it's opposite of so many. I am the same and enjoy it from others. Some think I am harsh.. I think I am just being realistic. I love when you put this at the top of your blog... * * * * WARNING! HARD CORE REAL ESTATE TALK * * * *

In any case, hope to see you around more... ;o)

ROBERT...... you made this comment... " I worked recently with a mortgage broker that sounds a lot like you."

Question... is that good or bad? ;o) thanks for stopping by.

JOE..... how long have you lived in Louisville? Went to high school there? Don't hold it against me, but I went to Trinity HS. In any case, not saying that Zillow will be bad or is bad... but I still think that there are way too many loopholes and many that you just can't fix. Hence why you need to talk to a mortgage professional on the phone... lead generators remind me of voice operated voicemails. You call into a large company and they prompt you with a question. Depending on your answer, you are then asked a different question, until they can find you your answer. These can be very frustrating, hence why you need a real voice at that time. But those cost money.

CHRISTY..... and it's just not lending tree... it comes down to the people behind lending tree... and they say how great they are... the awards and such, but you have all of these complaints that you never hear about, until you speak to people directly. Yes, there are some smooth transactions. My whole point to this post was that many won't be smooth... or, many will be misled and won't know until after the fact. thanks for your feedback.

JOHN..... never said on my terms. But with 15 1/2 years in this business, I think I have a very good understanding of how things should be asked, how a client should start off. Especially if they are less than perfect in credit. And nowadays, that can typically be anyone with a credit score less than 680 with less than 30% down... fitting better into this example, with less than 20% down.

Not sure how long you have been in lending.... but did you look at Zillow's model? Just curious... what makes it a wonderful start? Do you not think consumers will be misled. Yes, no system can be perfect. But if you read all of my replies, you will notice that part of my argument in all of this is how Zillow is advertising themselves with this new lead generator. I find it to be misleading.. why? By talking about ratings by the consumer... read the comments above. I am not the only one that thinks this... ratings can and will be abused, misused, and gamed. Not by all, but enough to where this system will hurt more than just a few consumers. With that said, how can one back a system as this then? Just let me know your thoughts.

Overall, I appreciate your feedback, even though it seemed as harsh as mine.. But more so, give me examples and reasons to why you stand behind a system as what Zillow has created. It's very easy to attack someone and what they say, but with no back up... no reason... no examples?

Lastly.... get off my soap box? hhhmmmm.... the industry has lost most of the losers? Please read my whole comment to David... 04/06/2008 09:42 PM and my 2 examples of the quotes that were left by other loan officers... also, when you get a chance, read each and every comment on here. There are two people that have already tried this and have found out that it's just like how I described it... even with all the bells and whistles to make it better, you will always have loan officers game the system.... and this type of system betters that company that has all inside loan officers, dying for leads... those types of companies will be all over a company like Zillow... that is a true statement... I have seen them out there and how they used Lending Tree... and lending tree has a rating system also... it was gamed by both lending tree and the loan officers....

One more thing,.. you stated... "Finally someone has come up with a good way for this stuff to work, let's help them improve it."

It will never be bullet proof.... and I know how I deal with clients when I first talk to them. I do not give them false hope... this will happen more with those that have a credit score less than 680 and less than 20% down... and if they aren't FHA approved to do loans with this criteria just mentioned, then that borrower will not be getting the best mortgage for them.... hands down... and I listed to links to my response to David, that gives proof to my comment... proof, not opinion.

WAYNE..... question for you.... I blog over the internet.... then you would not trust me? I am actually taking a clients application tomorrow that went with a lender in their town.. He could not close their loan on April 1st... had the loan since February 27th.... they now can't do the deal. They are in VA... and I can actually do the loan. Another client.. he got his lender from his realtor... that lender can't do the deal, after he said he could... he is a broker, relying on someone else.... I will be writing about this soon... major issue... thanks and look forward to your reply, thanks

Jeff, I really don't have the time to read everyones comments. I have read a few though. Your Proof? Not sure what proof you were talking about or what you are trying to prove. You made quite a few comments concerning several things so I am not sure which comments you were defending.

I will address one area in which I think this lead generator system is valid and has potential. Lending Tree has a slogan when banks compete you win. Well anyone who knows how the lending tree system works knows that there really isn't a whole lot of competition going on. Generally speaking on average, lending tree leads are only given out to 4 brokers/lenders per social. That is because most broker/lenders don't want to sink a huge investment into their exclusive internet leads. Well in contrast to the lending tree system the zillow system doesn't have any broker/lender calling them, the customer only calls who they want to. That is a HUGE difference by itself but since you haven't been able to wrap you brain around the rest of the concept let me help you. There is no advertised Rate that someone can get as apposed to lending tree advertising rates on their TV ads. Zillow is taking up where Lending Tree is falling short, they are actually giving alot of potential lenders a chance to compete, not just 1,2 or even 4. Zillow is giving a the consumer the power to have a little more control over who they do business with.

I do get your over all point that there are so many particulars to doing a loan that it will be hard to wrap it all up into a superficial questionaire filled out online. But here is the deal, the leads are FREE, if you don't like them don't participate, but don't just throw the baby out with the bath water if don't know how to give a baby a bath. It is what it is, I personally like the opportunity to bid, and yes you better believe that I am going to bid low to win a chance to get a call from that borrower. If the borrower happens to work out to the information that was given to me then great no changes but if the borrower left something out I will simply explain to them that "Bud Light" has taken the ability to read minds out of their beverage and hope they understand.

As far as FHA being the way to go, well that isn't neccessarily true... there are alot of parameters that go along with that. You may be the beneficiary of the new loan amount adjustments which has given you a broader platform in which to sell your FHA but in most states we don't have that luxury. So now should I lump you in with all the other guys that misquote deals, or steer people the wrong way. Also, you throw that 15.5 years in the business around pretty losely, I know guys that have been in the business 20 years that are clueless. Just because you have been around a while doesn't really tell me anything, for all I know you have been writing FHA all those years and you wouldn't know the first thing about how to write other conventional or prime or non prime loans. I am not doubting you are a very smart, trustworthy, and ethical Mortgage professional but don't just poo poo and idea that really hasn't gotten a chance to get off the ground, as I mentioned it appears that zillow has come up with a cutting edge way to make internet leads work, and just may be they will be willing to tweak the system to facilitate a better experience for both the customer and the lender.

APR

2008

The best way to generate a lead is to help a customer find what they are looking for. Everyone I know, including through my experience through buying my house, the agent we picked after speaking with around 14 was the first one who just helped us... through our conversations, she picked up on some questions we had.

Most agents just said oh yeah well we could help you with that... but never really did. Where as the one we picked, listened and put effort into sending us the answers. Then we picked her...

To me, a site that could generate more leads, is a site that can combine customiers, with agents in a platform that can foster Q&A.

Jeff - I do think their system is better than LendingForest (lol) but still not the answer. Good post!

John Cookman - I think you are wrong with many of your criticisms of Jeff and his post. If you like the system then say so, and say why. But you don't have to try to attack Jeff's experience or abilities to prove your point. It sounds like to me you are exactly the type of loan officer Jeff is talking about here. You said you are quoting these low rates that people can't qualify for and then coming back with higher rates after you find out the facts. Your website says you are a financial consultant, but don't consultants get all the facts before making a recommendation? You are like a M.D. that offers a medicine because you really like it, but then when you find out it isn't the medicine needed for the patient, you say, "Hey, lets try a different one!" That is scary.

Prescription without diagnosis is MALPRACTICE!

Keep up the good work Jeff!

Olan, your comments to me are quite amusing. Next time try reading what I wrote if you are going to comment on it, you won't look like such a clown. I don't think one sentence you wrote had any reference to anything I have written to Jeff.

Jeff and I see the ZMC in two different ways, which is ok. I am glad he feels free to express himself in anyway he wants, but don't blame a guy for patching up the holes in his argument. I have nothing against Jeff at all.

APR

2008

JOHN C. ....... thanks for the reply.... but reading everyone comments gives you a better understanding of where I am coming from and what others think. Especially if you are going to get this involved in a discussion. Would a lawyer try to get his client off the charges just with a discovery? I don't think so....

You talk about Lending Tree having a slogan, to where banks compete. And that they only allow 4 lenders to compete. Then you talk about Zillow allowing more quotes than this. First off, you are wrong about Lending Tree's platform. They also circulate those leads. Lending Tree also has their own division. They can also cherry pick those leads and also go back to the leads that the other 4 lenders are competing on. Also, Lending Tree started a separate company, Lower My Bills, and circulate these leads through that company also. There is nothing from stopping them from doing this... they own those leads. Do you think Zillow won't do the same?

I don't have time right now, but I will go back to Zillow's site and higlight some statements that are somewhat misleading. Just as Lending Tree did.... there looks to be transparency, because the average consumer doesn't know... and they typically will believe what they read. But I will share some of this with you hopefully tonight, if you are still up for it.

Then you talk about the fact that Zillow will be free to lenders... yes, which will even attract a lot more than normal... which means a lot more quotes... which means more low ball offers to where the honest quote will get lost even more so. Besides, as I have mentioned, most of this set up is for the loan officer that has nothing in their pipeline, for the most part, who has time to put 100's of offers out there. Just my opinion, but the same of several others that have been doing this for 10 + years.

On the same note of multiple bids... I like your honesty. This is what you said... " I personally like the opportunity to bid, and yes you better believe that I am going to bid low to win a chance to get a call from that borrower."

Again, I like your honesty, but you are part of the game being played now. Even if they fit exactly what they filled out, you will be changing something or another 9 out of 10 times... unless the market became much lower, in that quotes favor. Again, I like your honesty, but you just confirmed a good portion of my argument.

In regards to FHA and my statements... I am working on a jumbo series and these FHA jumbo loans will still be much cheaper than a regular jumbo loan or even a conventional loan with secondary financing. Unless the consumer has stellar credit and 10% or more to put down. And if you know anything about credit scores, most clients, not all, will fall into less than 10% down with credit scores less than 680. That will automatically place you into a FHA jumbo then. In regards to my 15.5 years of experience.... you are absolutely right, there are several that have more years of experience and don't know anything. I just took a loan from one, with 30 years in the business and he couldn't close the loan FHA.

Overall, my personal opinion.... you will be one of 100's making a bad name for Zillow and lenders nationally, but offering a much lower rate and or fees. Anything to get a client to call you.... instead of educating the consumer, you are will to low ball. I am opposite of this. In regards to my statement of myself needing proof from you. It's because your statements the first time around had holes in them. I backed mine up with actual information, which I gave you links to. When I was taught about debating, the number one way to win was to show proof and your sources, not opinion. You gave me your opinion with no backup, hence why I asked for proof.

DAVE..... good point, if I understand what you are trying to say... John C.... please read this reply I am about to write...

Something else that I have found out... when I speak to a consumer, interview them, I ask them questions and usually give them answers before they ask their questions. You know how many clients in 20 minutes, after I speak to them, tell me that I answered many of their questions before they even asked them. ??? More than 80%. That's because I educate the consumer on the process, what we are doing, and what to look for. Most loan officers give the basics... rate... don't give payment, loan amount, and sometimes a good faith estimate. It goes hand in hand with those that low ball. If you don't give all details, that quote is meaningless.

OLAN...... I agree with your first statement.... it seems better, but still won't be the end to all, no matter how much you tweak it. And thanks for the compliment.

In regards to your statement with John... he can attack some of my experience and knowledge. It did it semi politely... doesn't bother me. I like a good debate. But I asked for proof, he gave me opinion. There is a difference and so many clients are given opinions by loan officers, who make them sound like fact. So misleading and sad.... I hear of it often.

Overall, I do agree with your statement, in regards to John low balling offers.... if so, then I don't understand his arguement, because he is doing exactly what I am talking about and why I don't think this system won't work. And let me make that statement clearer... it will work, it will get borrowers loans... but it doesn't work on the other hand, because many of these consumers won't get a good deal... not the best... but not even a good deal... which...

which makes the rating system a joke. If a client got a bad deal, but did settle, how do they know that they got a bad deal. I have seen some clients get bad deals and talk up the loan officer... saying how great he was and everything else. Hey, great... but what you don't know, might have been bad and would hurt you in the long run. Sad, but so true and it will happen. Sales people will be just that, sales people.

JOHN C. ...... well, he did mention one thing, and that was your statement about low balling offers... and on your web site, that I can't get to function... I click on several things and it says errors... but one thing that you have on the front of your web page...."finance consulting".... low balling is not consulting... educating before quoting is consulting... so you can get the right and correct info before misleading that consumer, giving false hope.

I tried working some leads for my boss. I hated it.

Poor people were getting bombarded from all sides.

Jeff, wow - well I can go in circles with you all day but it never leads anywhere. The simple FACTS are you are not a supporter of the Zillow Mortgage Market and I am. I see the benefits and you see the negatives.

I am trying to get my website fixed. Someone hacked into my system and my .php appache server isn't working with my site. Hope to get it resolved soon. I am a do it yourselfer when it comes to webstuff.

Jeff, you should try writing for the NY post, you seem to have the knack for taking words and statements out of context, I am sure they would love you there. You quoted my statement about giving a low bid, but you failed to quote the rest of that thought. How conveinent for you. Is this how you taught your students to debate. What a joke. Again, I guess my statements need to be broken down on an elementary level. The next sentece said "If the borrower happens to work out to the information that was given to me then great no changes but if the borrower left something out I will simply explain to them that "Bud Light" has taken the ability to read minds out of their beverage and hope they understand." I never once advocated giving a low-ball quote just to get business, but what I did advocate was coming in with a low quote, meaning lower than I may usually come because I know that is what it will take. I am willing to take less on these kind of loans. The whole Idea of the zillow mortgage market is to keep lenders on the cheapest side as possible. If I bother to quote something to someone then I should know that I am going to have to do a loan for alot less than normal, but in the changing times i am coming to the reality that I will have to stack them deep and sell them cheap.

I think it is very unfair of you to try to portray me as a low baller just to get business and then perform the bait and switch. The fact of the case is, I have a 95% pull through ratio. I am sure I don't do the volume that you do but the loans I do are good, honest and always correct. As a matter of fact, you will never find a customer of mine that could say I didn't honor my first GFE. Yes I have been wrong on a GFE and I have had to lose money a couple of times to make sure I didn't violate that committment to my borrower. Personally I can absorb coming in low, I am now just a simple Loan Officer with a create mom and pop company that allows me to be low by giving me 100% of my commission. The qualifying factor for me to work with this shop is to make sure I give the borrower the best deal available. I haven't had anyone undercut me on rate or fees yet and I think the main reason is because I start out very low.

After your last comments I am finding you less credible and more hypocritical.

(Anybody have fireworks? This is turning out so much better than a Hillary/Obama debate:-)

Jason, :-)

APR

2008

Update : 4/10/08 This was written by Rich Sweum : Wacky Zillow Quotes #1 and #2 This is exactly what I am talking about. These rates with these fees and points don't exist in the real world of mortgages when comparing them with an APR, that may be misleading. SAD and pathetic. And because this site is free to lenders and loan officers, you will see a lot more of this. Just my opinion, but you watch and see.

APR

2008

Jeff -

Please reconsider joining Rich in his witch-hunt. That LO, who is coincidently a local competitor of Rich's, is clearly quoting fairly and accurately. It may well be that neither you nor Jeff can compete with his quotes but that simply is what it is.No wonder Realtors have a code of ethics governing this type of competition.

The transparency that Zillow has brought to loan quotes certainly demands a new level of maturity and professionalism from lenders. Transparency demands professionalism in both lenders who quote and in those who would call them out. Zillow Mortgage Marketplace's transparency more likely to expose lenders' lies than any other mechanism available to borrowers today. It's simply ludicrous to suggest that transparency will yield less truthful quotes and if Rich's post achieves anything it illustrates that fact quite beautifully.

PS. Did you delete John Cookman's last comment? It appears that he too can vouch for the accuracy of the quotes submitted by the LO who Rich is criticizing.

Jeff & Dave; First of all...I do like the "concept of Zillow Mortgages," I feel that it is good start, it just needs to be "tweaked a bit." I performed due diligence and spoke with LO's from both companies that I tagged as "wacky quotes" and professionals from their own companies were troubled, even dismayed, at the quotes that were given. Those rates for those particular loan requests at those fee structures DID NOT EXIST. Now, sometimes people can hit a wrong button, make a mistake and not CAREFULLY read a loan request...(cash out refi v. rate term, etc.), but they should be more careful! I would not have an issue with ANY of my loan quotes that I have given being scrutinized by ANY other lending professional and the rates and fee structures that I have offered are real based on the information presented by the borrower and the rates available at that specific time. Further, I only make quotes on "cookie cutter" loan requests because everything else, low credit scores/high LTV's/anything other than SFR's gets too complicated to offer legitimate quotes.

Lastly, if they can prove to me via their rate sheets that those loan quotes were legitimate, I'll gladly eat crow and give them both gift certificates to Ruth's Chris and apologize on AR. I believe my money is safe however because of the confirmation I received from LO's at their own companies.

(On a lighter note, may I have a gift certificate to Ruth's Chris Rich:-)

Jason...only if I can be in your Presidential cabinet, until then, just a Red Robin card for you!

DAVID.... let me explain something very simple here. Yes, I did delete John's comment, because it was not appropriate. I will debate all day facts vs opinions. But I guess you want to be a part of this. Go back to both quotes. You CAN'T have the rate whose APR is exactly the same on a 7/1 arm. You still need to have that factored into the APR. We had this discussion on the phone. I truly don't care if that rate is available or not. I am attacking the whole quote, not just the rate. In my comment, did I mention just rate? There is more to a quote than just rate.

In regards to John's comment.... he went overboard. I can debate with the best of them when it comes to facts. Rates aren't always true facts, because the market changes every day. But when you pit a rate that is the same as the APR on and adjustable, some of these loan officers better go back to Mortgage 101. That is misleading, no matter how you look at it. Many loan officer's don't even know how to compute APR. And the average consumer will compare rates and APRS.... that is just plain and simple.

You all talk about transparency. Transparency... transparency is not saying that I am showing you what I am giving you and what it costs... it should be about integrity, can I close you on what I quoted you. I have a huge problem about all of this. It goes back to the Lending Tree mentality. You tell me that you aren't like Lending Tree.... Just because you ask more questions, doesn't mean much. The concept is the same. And people will be mislead.... In regards to his comment and me not having that investor... I have the majority of them. I have that same rate.... but not at that APR.... if we were to compare apples to apples, I would lose because my APR would be a tad higher.... that is my point that you and John fail to realize.

David... you told me it was a bug, that you had to fix it.... it doesn't look fixed to me.... so, are you telling me that you are misleading the public, when you know about this issue. If you scream transparency, shouldn't Zillow be acting on this and disclosing the issue on your back end? ??? Seriously, I would love to know that answer then..

So...it's not a witch hunt as you so politely put it.... I call it the transparency hunt.... you are an advocate of transparency, but there are some things hidden from the public. Sounds like double talk to me.

OK Jeff, time to call BS ...

1) I still have John's comment in my inbox. Is it truly inappropriate to disagree with you? Do you plan to censor all comments that claim you are wrong? For the record; John's comment merely confirmed that the quote is indeed do-able and is not bogus. Care to explain why that is inappropriate?

2) Last week I called you to explain that due to a Zillow error we were miscalculating APR on quotes with low fees. It is totally inappropriate for you to misuse that information to unfairly criticize a lender offering attractive quotes when you know that he has no part in this problem.

To clarify the issue we had with APR's;

APR's were being incorrectly rounded down to the nearest 1/8th. This caused some quotes' APR's to equal their rates. Obviously not ideal; this issue was given high priority and the bug was resolved this week ... but quotes posted prior to the fix are still incorrect (we took the call that changing existing quotes after the fact was potentially more confusing to borrowers.) I hope that clears that up.

Now, the $6M question is ... will this comment will be deleted?

DAVID.... as I told someone... that was the first comment that I have ever deleted... and John knows why and we are both on the same page now. You can call me out all you want, to discolor the conversation which your comments pointing to different issues.. But Yes, the comment was inappropriate because of what he stated. I don't sell myself on other people's posts with the fact that I can or could be lower in rate. Everything that I talk about is fact with opinion... such as guidelines, on how loan officers mislead, red flags. Rates don't belong in that conversation, not at all. And you can only go off John and other people in the industry. Just for arguments sake, how do you know if they are correct.

In regards to the APR... yes, you told me you were working on the bug... in your comment above, you told me that it is fixed. The quote below is from yesterday, the 10th... well, it looks wrong to me. The rate quoted was 5.5% and the APR is 5.625%. This person is charging 1 origination fee which is $5,610. If you actually compute this with the 15 day interest per diem, the closing fee, and the lender fees.... the APR is 5.614%. Yes, it's lower.... but this could make a difference if someone else has a lot more fees, if they were honest.

On another note.... I don't have the other quote listed below, but an arm operates differently in regards to APR. It has to take an average after adjustments with the new calculated rates. The 2nd example that Rich Sweum mentioned is way off base, because it isn't calculating the adjustment 7 years from now. That is not reflected in the APR.... hence why I am making this point. But back to basics... you said the APR is corrected and in the first scenario, it should be lower than what it's showing. Which means... if someone else charged just enough to make it 5.625%, but then someone else charged enough, but it was right under 5.75%, ... but it should be 5.68%.. that is different than 5.75%. And you might make the statement that it's close enough, but people shop those kinds of details....

Lastly... about the no non-sense question, the $6 m question that you presented. Let's be adults here... as I mentioned, his needed to be deleted because he attacked rate, since I can't give that rate out, that I should send him my deals. I take that personally and can be talked about on the phone, not in this forum or comments. You can debate me all you want in opinion... and even with facts... but not on something that can't be seen, unless he wants to send me his pricing sheet. But I never, never said that rate can't be quoted... all I said was that the quote was misleading... why? because of the APR. So, I love when my thoughts get changed by someone else, when I didn't make that statement. It's called, assumption. And of course you are going to defend your system.

Overall....I have my opinions about it... will it work.. yes.... for everyone... no. Will all consumers get a good deal.... NO... it's the nature of the beast. But advertising it like it's the next best thing to sliced bread is where I have my issues and concerns...

quote

David - Jeff did email me privately and we talked it over. Basically we agree to disagree (i hate that terminology but it seems to fit). I do agree that the APR situation needs to be fully resolved more for the legal side of things than any other. As I told Jeff, I could do the 7/1 deal as quoted. The APR could be the same if I chose to pay all non re-occuring fees out of my ysp. With a prepay penalty (which was indicated on the quote) it is definitely doable, but on the other hand it would be an almost gratuitist loan. In my case, I can afford to do loans like that if there is other incentive for me, such as building good reputation points on zillow. I am looking at the big picture in that case. I don't have money that I have to split with anyone so it is easier for me to do this. David, I know you guys will try to tweak the system to be the very best that it can be. I support you in this endeavor to help make a win win situation for the consumer as well as the professional on the other end. Let's hope that quotes will be given responsibly.

Jeff - I think you are not seeing the big picture here. Your opinion seems to be respected in the blogusphere especially here at AR. So it is my opinion that it would be good to have you come out with a post that shows some support for zillow and honor the fact that they are trying to make our industry a little better. All though I have not been around AR that long I can see that the zillow guys do have an affinity and respect for the professionals here at AR. I think they will take our professional opinions to heart and make good qualifiable changes to make the system better. I am honored by that myself because zillow is a recognized brand in our industry.

Lastly, becareful of your hypocracy, it will only hurt your credibility. Here is what you wrote in your last blog,

"So, I love when my thoughts get changed by someone else, when I didn't make that statement. It's called, assumption."

Here is what you wrote in an earlier comment within this same thread:

"Also, Lending Tree started a separate company, Lower My Bills, and circulate these leads through that company also. There is nothing from stopping them from doing this... they own those leads. Do you think Zillow won't do the same?"

Now who is doing the assuming? Do you have knowledge of a game plan that zillow is going to sell these leads? That would actually be contradictory to the whole reason that they put this program in place. Are you going to go back and delete that comment? This was an opinion made by you that can't be proven by you. So based on your argument as to why you deleted my comments, you are going to delete you own comments right? Actually I have found several hypocracies on your part throughout the many comments you have made about my comments. But I don't think exposing those would be of any benefit.

I would like to make it known that I have gone back and read alot of Jeff's blogs and I find Jeff to be a very credible source of information for Mortgage information. He is highly competent and quite a good writer I might add.

My hope is that Jeff will find it in his heart to explore some options and solutions that will ultimately make the Zillow Mortgage lead program the best in the industry.

Keep up the great work David.

On that note, let's all go out for some dinner at Red Robin, the tab is on Rich Sweum:-)

APR

2008

Holy Cow! Seems like we all need to take a step back and get back to work.

GREAT thread..... so basically I'm a slimeball Salesperson?

Hi Jeff... what up?

:^)

MAY

2008

Jeff - Great review. I am tending to agree with you on this one. The way Zillow goes about this is a subpar way. We really need to sit down with these people and have a conversation, see exactly what they want, answer questions that natually arise throughout the process. None of this is possible on the site.

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