Earlier I posted my opinion on Zillow's new Mortgage Marketplace. Wow.. I actually got Zillow's attention. Not only did I get comments, I also got phone calls!
So to be completely fair to their new system that allows borrowers to blindly pit lenders against each other to provide quotes based on... well, based on nothing really... I decided to try it out myself.
I registered as a customer and filled out the form. On that form I asked for a mortgage quote for a no money down mortgage loan with a credit score in the mid 600's. 5 days later I have received 2 quotes (ONLY 2) and they were close to 1% apart in rate.
The problem is that outside of VA or USDA loans, there are no more 100% loans available today... FHA and conforming loans will require at least 3% down, and conforming would require 5% down with a mid 600 score. Neither of the quotes provided me with any feedback beyond a rate and estimated fees.
Here we have an uninformed lender advising an uninformed borrower about the best rate or program they can get.... WHAT? When will we all get beyond smoke and mirrors?
Or does this even matter? I only got 2 quotes in 5 days in the only good market in the US! Could I be worried about nothing here? Or is it just a matter of time that somehow this will get popular and make mortgage professionals look bad in the end. After all, we are the professionals and SHOULD know better than to quote rates based on NO INFORMATION. How can you back up your quote?
I hope some major changes are made here if it continues, but somehow I doubt it. Zillow's money model is to sell ads, not service. So the service does not have to be real if they can simply attract enough people that might click on the ads...
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Is this any different then Lending Tree?
Aaron,
Yes it is different. Lending Tree sells leads. Borrowers apply online with Lending Tree and actually provide information, including how to reach them. Lending Tree's money comes from lenders wanting to buy these leads. I am not a big fan of this method, but compared to Zillow I think it is much better.
Zillow's revenue plan is to sell ads. They have enough unique content to attract large numbers and the fact that they now offer mortgage quotes from lenders and you can be anonymous and never have to talk to anyone will be an attraction to borrowers that don't want to be "sold." I have never veiwed my job as a sales job, but there are many that do and treat the borrowers as if they are nothing more than a quick customer at the cash register. As for Zillow, that is the appraoch here... come visit us with this "gimmick" and click on a couple ads so we can charge the advertisers.
Hope that answers your question.
Ed - With only two responses, sounds like A: Not too many lenders are monitoring Zillow, B: Lenders haven't yet signed up or paid for advertising, or C: Lenders aren't willing to quote without having some information about the client!
Either way, I don't think this process will be replacing you anytime soon.
Hey all- Sara from Zillow here. Thanks for the post Scott. We do monitor the boards as best we can. We have already banned some people from the site because of their activities. However, we think the best way to weed out unethical people out is by empowering consumers through a rating system. Upon interacting with a loan office, people can leave feedback about them. Very similar to being able to rate a seller on EBay. So it is in the best interest of the LO to provide good, honest service to build up an online reputation. If someone is being less than honest, the public will help bring this to light. Zillow Mortgage Marketplace is about three weeks old, so this system isn't very built up yet, but is getting off the ground now.
Aaron- Scott answered your question perfectly. It is much different than Lending Tree for the reasons he mentioned.
Penny- As of right now, 16,798 requests for loans have been made, and 48,722 quotes have been given. That is an average of about 3 quotes per request. (you can see these numbers on the main mortgage page) Considering the short time this product has been available and the limited advertising we have done for it, we are very pleased with the general response. No, I don't think this product will EVER replace a physical loan officer, but hopefully we can send some business their way!
(I started a Zillow Mortgage Marketplace group, if you are interested in discussing this product further with other mortgage professionals.)
Good for you in brining up this issue.
Bonner
Sara,
Who is Scott?
Ed Nailor - Charlotte Home Loans
Doh!... too much active raining for me that day ... Sorry Ed! :)
ITs ok...
FYI... http://activerain.com/blogsview/490765/Not-Sure-But-Will
Zillow can kill more deals than anything. I really wonder where they get their figures from. I agree it is great when the consumer is informed but not misinformed.
Gary- A lot of the information comes from public records. Here is the page on our site that talkabout what Zestimates are: http://www.zillow.com/howto/Zestimate.htm.
Zillow is one of the only automated valuation sites that is transparent about accuracy and actually publishes it online. Here you can drill down to see accuracy numbers for your specific county- http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm. When we get information about a home selling, we go back and look at what the zestimate was on closing day, and calculate the percent difference.
Hey Ed- Its two months later since you wrote this post. An update: there are about 2,500 registered lenders participating now. There have been about 39,000 loan requests and 175,000 loan quotes given (we publish these numbers on the home page of ZMM). Using very simple math, that would be an average of about 4.5 quotes per request now. So on average, people are now getting more than the 2 quotes you site in your post.
Sara:
The 2 quotes I cited were the only 2 quotes I got. I am sure that there are more quotes being given now as there are many starving mortgage lenders willing to sell their soul to make a buck.
I said earlier that I would actually sign up as a lender and try the system. I did and will post my review of that soon. (You are not gonna like it though.)
Sara, may I ask you a question? How many lenders base their mortgage lending on the Automated Valuation that Zillow provides?
Well, I guess if we only got positive reviews, we wouln't d have a lot of incentive to make the site better. I pass all the things I read and hear from you lenders here on AR on to our VPs and product managers, so know that your review won't fall on deaf ears and will be read. For what that's worth. Thanks for at least trying it though.
Gee, I don't know the answer to your question. Seeing as how the zestimate isn't an appraisal, I hope not many?