Zillow launches 'Mortgage Marketplace'
New service from the real estate site links borrowers with lenders but protects anonymity and opens quotes for all to see.
Real estate site Zillow is set to launch on Thursday a service that will let borrowers get quotes anonymously and lenders get leads for free.
People applying for home loans online now have to supply personal information to get quotes. Their information is often sold to other marketers, their credit rating can get harmed from so many credit checks, and the rates are usually higher than initially advertised.
Zillow's Mortgage Marketplace aims to solve those problems. Borrowers fill out detailed loan request forms but do not provide any personally identifiable information. When customized quotes are available, the borrowers get e-mail alerts and can choose which quote and lender they want.
Zillow vets the lenders so only reputable ones can offer quotes and any lender can view competing quotes, but only lenders that have registered on Zillow can submit quotes. The quotes must use a standardized form that discloses all fees and Zillow estimates the taxes, insurance, and monthly payments, making comparison shopping easier.
There also is a rating system for borrowers to provide feedback on specific lenders. Zillow's marketplace lets the borrowers and lenders find each other, but does not participate beyond that in the transaction.
I asked Spencer Rascoff, chief financial officer and vice president of marketing for Zillow, how the ad-supported site plans to weather an online ad slowdown that already seems to be curbing spending by online lenders.
He responded that "big banks are increasing their spending during the downturn because they see it as an opportunity to gain share as the small guys go under."
In addition, a mortgage marketplace will do well not despite, but because of the suffering home sales market, according to Rascoff.
"There will be fewer new purchases but it's a good time for new refinancing tools," he says, because rates are low and adjustable-rate mortgages will be reset and need to be refinanced.