Blown Mortgage

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Zillow.com today launched it’s lender sign-up, another step along the way to the release of its announced mortgage product. The new product, which has yet to be unveiled is scheduled to be rolled out in the near future; but the company is getting the ball rolling by opening up the lender registration process to all lenders who want to get the first crack at “unlimited access” to the Zillow consumer’s who are interested in home financing.

At first blush the idea of unlimited access conjures images of packs of loan-starved mortgage originators with little to lose bombarding and haranguing Zestimate-browsers to no end; but according to Zillow’s David Gibbons the mortgage product will fit firmly in the “consumer-control” ethos of the company.

Gibbons couldn’t provide too much information on the new mortgage product but suggested that the ideals that have made the company a success on the real estate side (mainly information, consumer-controlled interactions among others) would be heavily emphasized in the company’s latest product offering.

From Zillow on the new mortgage product launch:

While we’re not sharing more details right now, we can say that we’ve built our product around Zillow’s model of openness and transparency that is increasingly important in today’s home lending environment. And, consistent with our information-based model, we have no intention of being part of the transaction. After speaking extensively to both consumers and mortgage professionals about the product, we’re confident that all parties will ultimately benefit from Zillow’s unique approach to home lending that is unlike any other in the market today.

Zillow.com Starts Vetting Loan Originators Early

Zillow isn’t just letting anyone who can fog a mirror pitch their mortgage-wares on Zillow.com. The company has implemented what I believe to be the most rigorous vetting procedure of all online mortgage marketing platforms. The onramp for mortgage originators requires the originator to provide the following to have access on the Zillow platform:

• Years of experience in the industry
• Company name and address
• Social security number
• License numbers
• $25 application fee
• Non-web-based email

Providing the information is only the first step. Zillow.com will take all of the collected information to do the following before providing access to loan originators:

• Verify the true identity of the applicant
• Verify their position and place of employment (an originator VOE!)
• Verify their license status and standing (good standing, currently licensed, any issues)

The company is using a third-party verification service to vet loan originators regardless of whether they are independent brokers or retail loan agents for large lenders such as Wells Fargo. Gibbons stated that the company reserves the right to run the credit of applicants if they are unable to verify the identity or employment of the individual applicant. While this process might make some originators antsy the measures should ensure that unsavory originators are kept out of the system.

Keeping Bad Apples Out

Of course, the rigor is an attempt to keep the bad apples out of the Zillow system which will be a daunting challenge. The vetting will help but of course there can be no guarantee that those that pass the minimum requirements for approval are professionals looking out for the best interests of the consumers; but they do go further than any major marketing platform online today. The nice part about the application process is that EVERY loan originator needs to be registered and vetted. The process doesn’t stop at the corporate level - so every loan originator for Wells Fargo that wants to participate in the Zillow marketplace must be approved regardless of Wells Fargo’s standing with Zillow.com. Compare their process to LowerMyBills.com or LendingTree.com and it is easy to see that this is definitely a big step forward in consumer protection.

Transparency for originators?

Zillow.com hasn’t published its exact vetting process but one has to wonder if an internet company has successfully navigated the myriad licensing configurations of mortgage lending to properly vet originators and provide originators across the lending spectrum a fair shake. Will a broker get a more rigorous look than a retail loan officer? Will it be biased (intentionally or unintentionally) towards one lending model or another? One can only guess at this point - but perhaps at some point Zillow will apply its legendary transparency ethos to illuminate the process so that lenders have confidence that they are being treated equally regardless of lending model.

A big step for mortgage origination - but what next?

Undoubtedly, Zillow.com redefined how consumers think about and relate to the real estate industry. There is arguably even greater opportunity in the mortgage lending arena to improve the space by giving more control to consumers. It will be interesting to see how they leverage and maintain the sense of trust a vetting process like the above is supposed to foster. It will also be interesting to see how they balance the promise of “unlimited access” to consumers for their mortgage partners with the consumer-control model of their existing products.

Can Zillow Zillowfy the mortgage industry?

Can they do it is the big question. Can the complex world of mortgage lending with it’s checkered past, dark corners and spaghetti-like regulatory, licensing and lending models be Zillow-fied? If Zillow can put the consumer in the driver seat of the transaction while educating and protecting them they will have made a major improvement in the existing mortgage marketing platforms online. This should provide them a massive competitive advantage above and beyond the lead aggregators that attracts mortgage-seeking consumers to Zillow. More consumers, more quality originators, more transparency, and better lending experiences creates a virtuous circle of industry improvement.

I personally hope they can do it. With the fresh eyes, the resources and the brand clout they are uniquely positioned to start a sea change. It won’t be easy but the opportunity is there and Zillow.com seems like the best shot out there to make it happen right now.

Screenshot, the sign-up process:

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