Zillow Mortgage

I’ve always loved this commercial.

It must be ten years old, and I’ve been using the term “flaming logo” ever since. To me, a flaming logo is something that looks really cool, but once the shine wears off, turns out to be less than useful. I’m willing to be persuaded otherwise, but my first reaction to Zillow Mortgage’s new charts is that they are a glorious flaming logo.

As my previous posts reflect, I’m a big fan of Zillow’s mortgage platform. They’ve leveled the playing field for consumers more than any other product to date. I won’t even argue that they may have “leveled” it a bit to much (and I like that too). But adding these charts is a step backwards if you ask me.

I get the premise, the charts average up to the second rate quote information that allows consumers to look at how rates are trending in their markets, or even nationwide. The technology behind the charts is top notch, but the results are gobbledy gook.

If rates have trended up for five days straight, what does that mean?

If the average rate quoted for a 30 fixed with a 720 fico in California is X, what does that mean?

If rates are trending lower in Florida than they are nationally, what does that mean?

The answer to all three questions is that it means nothing. At least they mean nothing to a consumer who’s trying to find a good mortgage. Zillow’s already built a fantastic platform that allows borrowers to compare quotes that are specific to their situation. What other people are being quoted is not relevant. It may cause them to think they are not getting the very best deal for them (when they are). Or even worse, it may cause them to settle for a rate that is not as good as it could be. These charts are TMI, and TMI is the chief reason why consumers become discouraged in their search for a decent mortgage.

Just like the Zestimate, Zillow has a lot of innovative and fun tools to get the conversation rolling. These charts will definitely qualify, and consumers might even say they like them. But I think it’s hurting the very people they’re targeted to help. I’m all for transparency, but relevancy is just as important.

I don’t think anyone outside of Seattle has pondered Zillow’s entry into the mortgage vertical more than I have. I’ve blogged about what I would do, what I thought they would do, what they shouldn’t do, and even asked other mortgage professionals to weigh in. Well, it’s all over now. Zillow officially launched the Zillow Mortgage Marketplace tonight.

From Zillow’s Blog.

David Gibbons was kind enough to give me a sneak preview a couple days ago, and here’s what I think it has to offer to both you, the loan professional, and to consumers.

For Consumers

Zillow provides a free and anonymous way for potential borrowers to shop for a bonafide mortgage offer. There was really only one qualification Zillow needed to meet for me to like this product. They made it. Zillow has reversed the rabbit hole so to speak.

As I pointed out in this post, the problem with the competition is that they either do not collect enough information to properly quote a loan, or they collect all of it, and give it all to a bunch of tele-marketers who bombard the borrower with phone calls. Zillow strikes the correct balance.

Here’s how Zillow works for consumers.

The borrower sets up a free profile/loan request with Zillow. The profile asks them what type of loan they are looking for, why they want it, and several qualifying questions. It gives the borrower the opportunity to enter their FICO score, or in lieu of a solid number, Zillow has partnered with a third party (my pure guess is CredCo) to offer a credit guesstimator based on series of profiling questions. The result is a mini application for the Loan originator to work with.

Next the profile is thrown into the marketplace without the borrowers identity being revealed. Loan officers then respond to the profile with a full quote that includes closing costs.

As Zillow receives these offers, they privately send email notifications to the borrower. The borrower is able to view all offers together on a private page hosted by Zillow. this report not only lists the offers, but provides links to the originators web site, or to discussions they’ve participated in on Zillow’s forums. It also offers up a Ebay style rating grade for each originator. The grade is based based on what they promised on Zillow as opposed to what was offered in real life. The borrower gets to review the loan officer.

Once a borrower chooses one or more originators to move forward with, they can contact the originator off line. With the exception of a later written review, Zillow’s involvement ends at the point of contact.

For Loan Originators (LO’s).

Ok guys, after reading the above, you are no doubt realizing that Zillow’s Mortgage Marketplace is weighted heavily to empower the consumer. To succeed, you’re going to need to be patient, competitive, and humble. It’s going to take you a fair amount of time to quote each possible client, and there’s no guarantee that you’ll ever get the opportunity to talk to them in person. I can’t imagine very many of you would be willing to pay big money for such an opportunity The good news is, you won’t have to.

Zillow is free baby! I’ll be the first one to say that free is never truly free. Your time is money. But write now, most LO’s have a lot more time than they do money to devote to marketing. What Zillow is offering you is free qualified leads, delivered to your email box. Real leads too. People who actually want a mortgage. No “do not call” lists to worry about, no mailers that are basically mailed to trash cans. Real, free leads.

How Zillow works for LO’s.

First you need to get approved to work with Zillow. They have a registration system that includes a background check to make sure you are who you say you are. There’s a $25.00 fee for a third party to perform this check. Greg Swann and Brian Brady at Bloodhound thinks this approval process might be the start of some sort of a standard of approval, like Underwriter’s Labs. I don’t think that’s really the case. What it will do however, is allow Zillow to ban bad actors. If you’re an ethical lender, this can only be seen as a smart move on Zillow’s part. The fact the service is free is going to make it a tempting place for cheaters to frequent. But it won’t take long for Zillow to vet them.

In addition to Zillow’s approval, you will need to opt in to a Code of Conduct. You’re promising to be honest & ethical. I forgot to mention that the borrower signs the same pledge. I don’t know that Zillow can do a whole lot to a borrower, but failing to live up to this pledge is going to get you booted. In addition, most of Zillow’s readership isn’t going to be likely to put up with a dishonest originators shenanigans. If you’re a BS artist, Zillow is going to be a waste of time for you.

Once you’re approved, you’ll have your own account page to visit. Here you can choose the kind of leads you are looking for, and how you want them delivered to you. This is done through the search feature. You can search for any and all leads in your area, or get more specific. for instance, you may only want leads from consumers with really good credit, or even really bad credit. It depends on what your good at. Once you performa search, you can save it, and tell Zillow to email you any time a new lead that fits your search comes in. You can also do searches for more than one area. It all depends on where you do business.

Now that you have a lead, you’re expected to send them a best effort quote. This includes rates, program details, and closing costs. Zillow automatically estimates the payment plus tax’s and insurance based the extensive public records that they already track. You also have the opportunity to write a personalized note to the consumer. I predict that this section will be largely misused by LO’s who paste in a canned response. I would use it to discuss variables like how the rate might differ if it turns out their credit differs form the guesstimate.

You can offer more than one quote as well. Send one for a 30 and one for an ARM. Use those notes to explain why you sent them both.

Then, you’re at the mercy of the borrower. You can see what your competition is quoting. you can also see when the borrower closes the offer. If you didn’t get a call, then you’re out of luck. If you do get a call, you’re good to go! Again Zillow is out of the picture from here on out, with the exception of a review.

It’s important to set expectations, then follow through on them. Because you will be reviewed, you need to be able to do what you say. Keep lots of notes as well. We all know there will come a point when an unforeseen issue will keep you from being able to deliver the rates you promised. If this results in a bad review, you’ll be able to respond to it through Zillow, and all consumers who see the bad review will be able to see your response.

The platform as a whole

I really, really like it. David said their goal was to create a transparent environment where, “ Lenders & Borrows are on equal footing”. I think they erred to the advantage of the consumer, but I also think that’s a good thing.

One downside to this model is that early on, I think some bad actors will be involved, and in the time it takes for Zillow to boot them, they could do just enough damage to sour the initial rush of traffic that will be coming Zillow’s way. It will be interesting to watch how aggressive they will be in policing the system.

In the long term, I think the package is great for both consumers and for honest and ethical loan originators. Really, it couldn’t be any better timed either. Consumers are suspicious of the entire mortgage industry. Originators are struggling to find new business without spending a ton of marketing doe. If Zillow can drive in enough early traffic, I think it’ll be a winner for everyone involved.

At the beginning of the month, I asked for a guinea pig to help us evaluate Zillow’s new mortgage product. Ronnie Roach wasted no time in volunteering. Zillow wants to create a transparent mortgage marketplace where consumers and mortgage professionals connect.

From what we know so far, it will be free for loan originators to participate. But free is never free, time and effort spent on an endeavor without a return is still money wasted. The only way to truly review Zillow’s platform is to use it in the real world.

Enter Ronnie Roach. Working as a mortgage banker in North Carolina, Ronnie has committed to putting Zilllow’s mortgage marketplace through it’s paces. Ronnie’s an accomplished mortgage blogger in his own right and will also be participating a regular contributor. Please welcome Ronnie to our standout crew.

On a side note, we’d like to get as much feedback as possible on this new platform. I’d love for our readers to chime in on their experiances as well. If you still haven’t signed up, I recommend getting off the fence. The approval process takes a few days, and you want to be ready to go from day one.

Are you sick of me writing about Zillow Mortgages yet. I understand. This is my last post for at least the rest of the week.

I’m looking for a temporary contributor to lenderama that wants to write about their experience with Zillow Mortgages. This would be a six month experiment where you will post monthly or semi monthly progress reports on how the system is working for you.

There’s no money in this, but you’ll get lots of link love, and personal coaching from me as to how best work through their system. I looking for someone with at least two years of experience as an originator, and has a record of writing on the Internet through blogs, Active Rain, Broker Oupost, MBL, etc… Please email me if you’re interested.

All about Zillow Mortgages.
Zillow Mortgages to give loan originators “absolutely free and unlimited access to consumers looking for a mortgage”

Zillow Mortgage - Place your bets!
How I’d build Zillow Mortgage - Part 1
How shopping for a mortgage online is like Morpheus’ enigma
Amy Bohutinsky hints at the future of Zillow Mortgage.
A quick Rich Barton blurb about Zillow Mortgage
How I’d build Zillow Mortgage - Part 2
Zillow Mortgage Prediction.
There is no Mortgage 2.0