Priceline.com currently allows consumers to name their price for airline tickets, car, and hotel rooms. Since February, the company has had a partnership with LendingTree, a network of lenders, to offer name-your-price mortgages, refinancing, and home equity loans. That partnership, which has generated almost $500 million in loans, will continue, Priceline said.
Priceline.com said that it hopes its strategic relationships with LendingTree and Alliance will help ensure that Priceline customers receive the most competitive service on the Internet for naming their own price and terms for a mortgage or loan. Through these relationships, Priceline is positioned to offer a more diverse set of loan options, tailored to each applicant's credit background.
The companies said they are forming the new venture to offer consumers another Internet alternative for obtaining name-your-price mortgages that will be fast, convenient, and money-saving.
"Given the enthusiastic response to Priceline.com's initial mortgage offering through LendingTree, it's clear that many consumers want a name-your-own-price option for obtaining home mortgages and other loans," Priceline chief executive Richard Braddock said in a statement. The service is set to begin after Labor Day.
Under the agreement, Alliance Mortgage, a subsidiary of Alliance Capital, will provide loan decisions on the Pricelinemortgage Internet site using Fannie Mae's automated underwriting system, Desktop Underwriter, the mortgage finance industry's leading automated system.
The partners hope that the use of online automated underwriting tools will allow customers to be approved faster and with fewer limitations than competing lending services.
The company also plans to spell out the loan's interest rates and guarantee the closing costs. Online consumers have complained that other Internet mortgage sites often change the quoted rates and closing costs.