Real estate website Zillow wants to give borrowers more control when they’re looking for a mortgage.
It may seem like an odd time to be entering the mortgage market, since the subprime crisis is still shaking up the national economy. But Spencer Rascoff, Zillow’s vice president of marketing, says people are looking for exactly what Zillow is selling.
In the Zillow Mortgage Marketplace, which launched last night, users looking for a mortgage enter their finances but not their contact information. Mortgage brokers and banks make their offers, and users get to decide which deals to pursue. The borrower is in control during the entire process, Rascoff says.
This seems like a huge improvement over the existing model exemplified by LendingTree, where borrowers’ contact information is given to lenders. The lenders decide when and if to contact you, which means borrowers can get barraged with phone calls. You also get a more detailed, customized offer than those found on Bankrate, where mortgage offers are sorted by zip code.
And despite the housing slump, the time is right for Zillow’s new offering, Rascoff says. The benefits to lenders are obvious — and it’s not just people buying a house who need a mortgage, but also homeowners desperate to refinance before their rates increase. Meanwhile, banks want to cut out the middlemen, and those middlemen (namely, the brokers) are struggling, so both banks and brokers will jump on any opportunity to connect with borrowers. Finally, the foreclosure crisis and its larger economic consequences are raising a lot of political heat.
“That raises the visibility of the issues that Zillow Mortgage Marketplace helps solve,” Rascoff says.
Zillow’s new product also includes lender-rating system like Ebay’s, so you can find out more about a lender’s reputation when sorting through offers. This kind of reassurance is particularly important now, given recent stories of unethical lending.
The Seattle-based company, which also offers estimates of people’s homes and other real estate services, gets around 5.2 million unique views a month, Rascoff says. It’s raised a total of $87 million.
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