Google Mortgage

TO bounce off of JBelonger's statements, I used to to work LendingTre leads. We had to really price things high to make it worthwhile, since we had to pay hundreds, even thousands to close those leads, ON TOP OF what the leads initially cost. Makes me think - as awseome as AR is and blogging etc, we still have to press-the-flesh all the time.

hhhhmmm..  well, I will disagree with Brian, comment #19 and Scott, comment #23.

Brian said this... "I enbraced Zillow Mortgage Marketplace and welcome Google, as well.  Anything that can drives costs down to the end user is welcome in my world."

When I once spoke to you, when you were one of the first to be asked to try Zillow Mortgage... on the outside, you said why not. It was okay... but when we talked, you didn't see much value. That you didn't see many deals come from this.  So, do you embrace Zillow because of it's platform?  What about the real value to the consumer? You can't compare Zillow to Lending Tree...  one model is cheap for loan officers and the other model is very expensive.  Yet, I have tried it and I have spoke to 3 other loan officers that do get some deals from it, but many the lose to loan officers that give lower rate quotes. It's just common nature in this business when you have borrowers shopping with lenders from all over, that know this, and in order to get those deals in many cases, they need to be cheap up front. But do they close?  Does those rate quotes change?  etc, etc. Besides, we don't know what the Google model will be like..  The rating system on the Zillow platform... semi a joke... for many reasons..

PS... Brian..  I know you pretty well... you are definitely a great marketer..  someone that has great vision, and can think outside the box... and you love being on the other side of the underdog and on the other side when many won't agree... but you can't tell me with a straight face that these models would be good for the consumer. It invites a bad form of competition in my opinion..  These types of loan officers tend to be order takers and are usually not on top of the mortgage game.  They can quote a rate and fill out a GFE... but anything outside of that?  Giving good advice?  Comparing different programs?  Being very knowledgeable?  I don't see it as much as I do from that street loan officer..again, just my opinion.

I also disagree with Scott, comment # 23, because he stated this.. "THIS WILL BE THE FUTURE. WITH GOOD FAITH ESTIMATES AND FEES BEING REGULATED TO THE DOLLAR THIS WILL ELIMINATE THE NEED FOR LOAN OFFICERS OR AT LEAST THE TYPE OF LOAN OFFICER WE KNEW THE LAST 25 YEARS."

It won't be the future because you will always need a loan officer and an underwriter.  Look at the Countrywide model...  you had the manager as a loan officer and an underwriter in many branches.  They tried to make it seem quick.. but gee, how many loan officers would approve their own loan, just to make a commission?  That model last only so long. You can't have a computer underwrite and close. 

Look, when DU appeared... many though you wouldn't need loan officers and underwriters...  well, you still do and even more so than ever before. A borrower can't be trusted to input their own info, let alone, be able to fill out a 1003, mortgage application.  Many loan officers can't even compute income correctly...  and once it goes into the system, you still need an underwriter to review this.  To have someone originate, process, and underwrite?  Are you crazy?  Maybe working at PHH has you thinking this, but I know their operations. They have too many involved, a jr loan officer, some kind of loan officer, a jr underwriter, an underwriter... etc, etc.

Overall, you are comparing that of buying stocks to doing mortgages.  In my opinion, a very poor comparison. I see your point and agree that not to many would ever think that you would be able to trade stocks yourself, online.  But originating mortgages and underwriting is a lot different. Just can't see how you could believe that it is the same and happen in the future. More than ever before, especially not now....  with guidelines changing over and over...  etc, etc.  How would a borrower know all of this and be able to do this online. 

I think people are looking for someone they can trust and they look online to get started.  Some of them end up going with an online company, but the majority of them I see go with someone local. 

Thanks for the update. It will be interesting to see where google takes the industry. I enjoye more efficient ways of doing business and google seems to be good and finding ways to do just that.

Hi Jeff -- Anything that Google puts on their radar should make any company nervous.  Interesting thoughts and I hope you do a regular follow-up on this.

Google definitely has the chops to dominate the tech side of just about any market they want to play in.  A lot of there ventures seem to be landing them in court lately. 

Jeff

Thanks for the post.....and the great discussion items! I agree with some of the comments regarding if Google is looking at this model; folks best listen up.

 For me, the bottom line is that I anticipate that we'll always have the individuals looking for the best deal.....and some will even work with on-line "companies" and could care less about building a relationship based on trust.

My focus is on building my business by maintaining relationships based on trust in my professional services.

There is a lot of bait and switching going on still in the mortgage industry.  I wonder how many will be sued in the future.

With good salesmanship and scripting this site won't matter; just like Bankrate, Lending Tree and all the other ones don't.  It depends on how you build your business.  Thanks for taking the time to put this article together Jeff, as it's very informative.  Does need some more profanity though.

EVen if Google can deliver a lower ate and fee there is no way the hourly paid unlicnesed mortgage consultants they will employ will ever be able to keep up with the all the changes.  They would oly be able to deliver a lower rate/fee to the 800 fico, w2'd wage earner, 40% DTI, with assets type borrower.  They can have those folks if they want them.....if they want to chase the low margin perfect deals that require no mad mortgage skills then they can have it.

I can't wait unil someone gets baited into working with a google mortgage consultant and after getting into contract they find out AFTER their loan contingency period is up that they don't qualify or after they receive their HUD they see the actual costs or extra points they will charge like Lendingtree and realize they can't transfer the HVCC appraisal to an upfornt lender to save a few $k, or get stuck having to wait 7 extar days to close due to APR changing .125% at the last minute.  Then their Realtor will have to go chace down a contract extension.

Bring it on......but I am concerned they will push down our ranking on google to make room for their space.     

Great post... and the end is why it is a great post.  If Google starts packaging MBSs... and investing in them, they WILL MOVE the market.  Which way?

When all the discount brokerages started started up their business, and once all the house information was online, we were told that traditional real estate agents would die out.  And now we are told that traditional loan originators are a dying breed.  Come on now.  People still need guidance from more knowledgeable professionals in the field and most people are willing to pay a little more for the service they need.

This will be very interesting to follow and see the outcome. Looks like this is all about money. No punt intended.

Consumers need to pay more attention to the difference between the quoted rate and the APR - that's where some of the mischief is - hidden fees.

Mortgage originations have been and will continue to be local for the most part.  The number of people needed to originate, process and fund the loan will continue to shrink.  The strong will survive and the weak will do something else for a living.  MHO.

Mike

I welcome all competition, Jeff.  Call me arrogant but I don't feel any heat from ZMM and Google.  The more they confuse borrowers, the more valuable you and I become.

Wow Jeff. I am glad that I am not in the lending business. I am sure that they would be tough to beat.

Although I agree with most that Google can be a game changer and cannot be ignored or dismissed, for those of us who have been at this for 10 years plus, all I can say is that the same old axiom seems to ring true--"Don't sell a rate--sell a service."  My clients aren't with me because I always have the lowest rate; they are with me because I have the best service.

Hi Jeff!  I hope you're doing well!  I was looking at the top subscribed blogs and happened upon your name, thought I'd click to see what you've been up to and realized that you're listed in Charlotte! I have NEVER noticed that before!  I guess it'll be pretty tough to get that dream job with AR with this being your home base too, huh?! Hey, I'm NOT giving up!

Have a great weekend and hope to see you in RDU for REBar Camp!  If you're not going to be there, you know I'll be wearing my "Ask me about Active Rain" button, so I'll represent for the 'team!'  :-)

So many changes that will affect lenders; interesting post and comments.  No matter what happens, I think face to face is important for borrowers.