Zillow formally launched their mortgage community today. David Gibbons was kind enough to give me the grand tour yesterday…my general opinion is that this is a big step in the right direction for a broken mortgage industry.
Stating the obvious…what Zillow has created is a community for mortgage professionals (Mo-Pro), a community that requires said participating professionals be of a certain grain of salt, checking their state licensing information as well as a social security number for a cursory level personal background check. These two stop-gaps insure a baseline quality standard and validate the community as (more) trusted and viable for a consumer as opposed to them walking into the many lender traps that currently exist on the web.
Zillow does not aggregate consumer data to then sell them as leads to the mortgage hounds. Thank God (Yahweh, Jehovah, Muhammad, Buddha, Jesus, et al). Joel has the best remedy for this ad nauseam dinosaur age practice made sickeningly popular by LowerMyBills, LendingTree et al…if he can drag them behind the shed, I’ll pull the trigger. Because of their well funded and non-conflicting business model as an advertising and media company, Zillow can afford to do this and should be properly recognized for staying outside of this black box.
Rating the mortgage professional based on service and rate/price quote accuracy is another positive aspect, a stop-gap to cap bait and switch and other traditional Mo-Pro smarmy marketing strategies.
Anonymity. Love it and consumers will too. However, consumer anonymity can and will cause participating Mo-Pro’s to chase their tail as rate voyeurs flood the system. It will be interesting to see what the client conversion ratio is. How many ‘leads’ will it take a Mo-Pro to respond too before they convert to a dedicated and paying client? Is it 10-1, 20-1, 100-1? While the ‘leads’ may be free, they will be cost heavy using the metric of time.
Consumers are notorious voyeurs. I’m one of them. I submitted my anonymous info to Zillow today and received 3 quotes in less than an hour. The info I provided was extremely attractive and easy to qualify:
692 FICO, $390k loan amount, 76% LTV, Full-Doc, low debt to income ratio, plenty of liquid assets…in other words a straight up automatically underwritten conforming loan scenario.
The responses I got (all 30 Yr Fixed Interest Only products) varied from 5.5% with ~$4900 in lender fees to 5.75% with ~$6200 in lender fees. The lowest quote came from a major bank, the highest quote came from a broker.
The three Mo-Pro’s that responded took one look at my info and undoubtedly shot over quotes without thinking twice within < 3 minutes. Not alot of time invested for nothing in return. No harm no foul.
So my questions are as follows:
How many scenarios as easy (and far more difficult) as mine will a mortgage professional have to spend time on to pull an actual client?
If this quote to client ratio is too high, will top notch professionals continue to troll Zillow’s community in hopes of fishing out a real deal?
If this ratio is too high, and the scenario is more difficult to place, how much real time will a professional spend taking the time to qualify and price the situation correctly?
If the anonymous scenarios are more complicated than my submission, which they assuredly will be, how will consumers respond to the resulting latency in information exchange?
Im going to pause here (for today) and end with stating that Zillow’s mortgage community is a (very) positive step in the right direction, but it needs something else…latent information can be perceived as misinformation.
Mortgage professionals are not equipped to handle what Zillow is throwing at them, not yet.