Zillow One-Ups Lending Tree With Mortgage Marketplace

Lending Tree is fond of advertising “when bank competes, you win.”

Zillow took that model for its Mortgage Marketplace, which debuted yesterday, and took the next step – lenders are competing for business, but consumers aren’t forced to surrender their personal information to receive the quotes.

No name. No e-mail address. No Social Security Numbers. No names of your dearest pets.

You fill out a form to request a rate quote and the rates are posted back to you. There are few gimmicks to be had as lenders can see each other’s quotes. And for those who tend to quote the impossible rate (not that such things ever happen), there’s also a consumer review process to hold lenders’ feet to the fire.

Rich Barton, Zillow’s CEO, said the Mortgage Marketplace comes in response to research the company conducted on how borrowers shop (or, to the point, don’t shop) for their home loans:

Borrowers have told us via focus groups and surveys that they spend woefully little time shopping for the mortgage they have – 5 hours. About the same amount of time they spent buying their last computer and nearly half the time they spent shopping for their last car. They also tell us that they want their personal contact information to remain private and that they want to see real rates that are accessible to them, not “teaser” rates that don’t reflect reality.

Todd Carpenter at Lenderama has a pretty good flowchart of the process.

Cost to the lenders is minimal – a $25 setup/background check fee.

There’s the definite possibility of lenders doing much work without possible reward. As an agent who one worked with Lending Tree leads, especially on the home valuation side, a large number of the folks making the request simply want to see what the rates may be just as many just wanted to see what their homes were worth.

But not all are just lookieloos. Last January I sold a listing for someone who had come to me through the Lending Tree system. It was the first (and to my knowledge) only client to convert through the Lending Tree CMAs, but the commission check was paid in American dollars and cleared the bank. That’s what counted.

Response to Zillow’s launch has been fairly positive, though Joel Burslem asks whether the information the consumer receives may be too overwhelming (which just may be fitting in this RE 2.0 world):

OK, so I submit a RFQ and the lenders can jump in and respond to me… but I get the sense there’s a lot of hungry lenders out there right now though. And I’m not sure I want to wade through the umpteen dozen responses I may possibly get; part of me is still wedded to the idea that I only want work with the best, most fair, most reputable lenders (is that naive?) – if I have to do too much work trying to figure out who that, is I might bail.

In that respect, could the Zillow marketplace suffer from some of the same issues as Trulia Voices – a location where many speak up, and some actually know what they’re saying?

(photo credit)