Blown Mortgage » Web/Tech

Facebook used to deliver foreclosure notice

Jay Hammond — Wed, 24 Dec 2008 18:51:27 +0000

Would your friends foreclose on you? Maybe. Maybe not. Unfortunately, your friends are not the only ones viewing your profile or Facebook or many other popular social networking sites. Creditors and collection agencies are, too.

MSNBC reports that at least two Facebook members have been sent legal notices via their Facebook account. In what appears to be the first case of it’s kind, an Australian law firm used Facebook to identify and contact individuals who had not responded to conventional methods such as phone calls and letters.

?We’re not aware of it having occurred in the past, it’s really just an extension of methods that have been allowed by the court, including email and text message in circumstances where the conventional courses are unavailable to us,? Mark McCormack, a lawyer representing MKM the non-bank lender seeking to serve the members told MSNBC.

Australian courts have allowed legally binding papers to be served on individuals via email and text messages in the past, according to the BBC. McCormick located one of the members through her Facebook profile, identified her by the personal information she disclosed and discovered the other member was among her ?friends?. The court did stipulate that the summons had to be sent to a private email address not posted on their Wall or delivered in such a way that other people visiting their profiles and pages could also view their contents.

That such communications must remain private is some consolation for consumers who find themselves at the mercy of collection agencies. One wonders how long it will last, given that several collection agencies have a reputation for not just annoying the individuals who owe but also their friends, families and employers in their efforts to collect.

So what, if anything, can individuals do to protect themselves? Well, the first obvious action is not to default on loans. Here’s an idea: use cash to make purchases and pay bills. Yes, such a thing is still possible. It’s not terribly convenient, but then neither are collection notices. Neither paying cash nor collection notice do much for your credit rating, of course, but at least if you are paying cash your payment is credited immediately rather than the 1 ? 14 day delay that can occur with other forms of payment.

Individuals concerned about being located through social networking sites should probably re-evaluate why they joined such sites and the nature of the information they are posting there. They should also be sure to read the company’s privacy agreement thoroughly before agreeing to it. Way back in 2002 the Electronic Frontier Foundation (EFF) offered 12 tips for protecting your privacy online. Seven years later, they still apply. The most significant being ?Do not reveal personal information inadvertently.? Facebook, MySpace, LinkedIN and other social networking sites all offer some level of privacy control which users are advised to tailor to their needs. Only in very rare cases, such as a band or author or artist whose profile is created and primarily used for promotion of their work, should be open and even then the personal details needed to create the profile should be sheilded from general public view.

Creditors are not the only potentially nefarious people lurking in the cyber-world. There are identity thieves, stalkers, and others having ill intent towards any trusting soul. And lest the criminal element feel to secure behind their virtual anonymity, there are also law enforcement agencies, government officials and other trying to police the information superhighway. As with most public places, the moral is ?assume everyone can and will see what you are doing? and probably tell someone else about it, too.

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Mortgage 2.0: I wonder if Wachovia will Twitter an FDIC takeover?

Morgan — Wed, 10 Sep 2008 20:21:02 +0000

Just got this from one of my friends online. Wachovia is now promoting itself via Twitter and letting everyone know about it. This image is from their contact page. I just started following them yet and haven’t gotten anything worth talking about; but I did want to mention that although Wachovia may be in a heap of trouble this is a Web 2.0 first for large banks.

While it may sound stupid for a company to be on Twitter, it can actually work. Comcast cable has scored huge PR and customer appreciation wins through their maintenance of their @comcastcares Twitter account. My colleague gave up on the Comcast dial-in customer service line after 10 minutes but got a response almost instantly through Twitter.

It begets the question though. Will they Twitter the moment they’re seized by the FDIC and put in to receivership? Will the FDIC support the Twitter customer service function?? I kid, I kid! Kind of. You can see if they do or not by following them here. If they don’t you’ll hear it from me, here.

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Real-time stock data for NYSE via Google, CNBC

Morgan — Tue, 24 Jun 2008 14:43:55 +0000

I thought this was cool.

The New York Stock Exchange has made real-time price data available to the public free of charge via Google and CNBC. So if you’re in to stocks but not in to paying for real time pricing you can follow along at either of the two sites. Google and CNBC are picking up your tab by paying the NYSE for the right to publish real-time data.

A sample here (fyi, I don’t hold any positions in MSFT).

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PolicyMap – Killer tool for real estate

Morgan — Thu, 22 May 2008 15:42:47 +0000

I just found out about PolicyMap a new service that lets you map an insane amount of data by region on all subjects ranging from mortgage originations, neighborhood crime stats and income demographics (and tons more). This could become a killer tool for homeowners looking to buy a home and for real estate agents and mortgage originators to use for everything from farming to advising clients. It can also be used by lenders to make risk assesments on properties and more.

Since I’m a tech geek at heart this site really appeals to me and could become a useful tool for you. It’s also an interesting toy to play around with to learn a bit about your neighborhood.

I pulled the below graph for Walnut Creek, CA that shows the percent of all purchase loans in the area that were made with subprime piggyback second financing. This data is pulled from lender’s HMDA reporting and broken down by census tract.

Let’s not overlook the scary fact that in 2006 more than 55% of all subprime purchase loans in the purple areas had piggyback 2nds. Of course this means that half of the subprime home purchases in these areas were made with zero down payment.

Here’s the legend:

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Follow what I like on the Web

Morgan — Wed, 07 May 2008 06:48:56 +0000

There is a lot of great stuff out there on the Web that interests me that if not for the lack of time I’d blog about here. If you’re looking for more mortgage news from the world around us simply click on the Google Reader icon to get my shared items feed from my Google Reader.

I track more than 150+ RSS feeds from news and opinion sites and blogs and share a great deal of information that I just can’t get to on Blown Mortgage. So add my shared items to your RSS reader and get a full-dose of mortgage news from Blown Mortgage each and every day!

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Mortgage News on the Run – Follow Me on Twitter

Morgan — Mon, 14 Jan 2008 17:00:27 +0000

As if you haven’t noticed lately I’ve eschewed rapid-fire news updates in favor of less frequent, more in-depth thought pieces. I figure you can read the news anywhere; but maybe I have a gem or two in my head that may add some color to the landscape.

However, I have a nagging urge to report the news as it breaks. I feel I owe it to you all. I just don’t have the time to review, quote and comment here now or in the foreseeable future.

Enter Twitter. If you are unfamiliar with Twitter ask your kids. They’ll tell you that it’s the latest in short-form communication that’s been hot with the Web 2.0 crowd for the last year.

If you want a stream of news updates on the mortgage industry (and some random thoughts from yours truly) follow me on Twitter at: http://twitter.com/morganb

You’ll get the links to the top headlines with a few words of thought. Much better than nothing.

WARNING: You’ll get some random football updates, thoughts on Facebook and more but primarily mortgage stuff will be flowing your way.

Hat tip to Brian Brady for the idea.

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Morgan will be speaking at Real Estate Connect in NYC

Morgan — Mon, 19 Nov 2007 05:53:22 +0000

Hey gang,

Yours truly has been invited to speak at the upcoming Real Estate Connect conference in New York City. The conference starts on January 9th and runs through the 11th. You can see the full schedule at the Real Estate Connect Web site.

I will be speaking on Wednesday January 9th at 9:45 am as part of a panel titled: Beyond the Written Word: Videoblogging and Podcasting. You can learn more about the panel here, but I have the pleasure of sharing the stage with some truly innovative people in the world of taking blogging to the next level.

The conference itself promises to be an amazing experience and I am particularly excited to hear Dr. Nouriel Roubini, author of RGE Monitor and former White House Economist, and Barry Ritholtz author of The Big Picture speak. As a daily reader of both I am looking forward to hearing them in person.

I recommend attending if you’re attached to the real estate market in any way. You can register here – and be sure to get in on time to see me speak!

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Show your Blown Mortgage Pride on Facebook

Morgan — Fri, 09 Nov 2007 00:44:13 +0000

If you’re an internet geek like me you now have a chance to show your Blown Mortgage pride on Facebook. Yeah, we’ve got a group; and while we’re not expecting Stephen Colbert type-numbers, we’d love to extend our community beyond the blog. We’ll have some stuff there worth while, and the best part is that you can contribute news articles, items of interest , rants, raves and so much more!

So if you’re a Facebook fan and a Blown Mortgage fan then you need to be with us at our new Blown Mortgage Facebook group.

–Morgan

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What Would You Do if You Were Zillow Getting into Mortgages?

Morgan — Wed, 31 Oct 2007 07:12:45 +0000

Zillow announced a while back that they are launching a new mortgage service for the users of their site. They must be getting close, because they are currently recruiting for an industry relations director for their new mortgage opportunity. Todd Carpenter over at Lenderama started a discussion about what possibilities this new venture holds for Zillow and the mortgage industry. He opened up his blog for feedback and discussion and says that he has some ideas of his own that he’s holding on to for the time being as the conversation develops. The crux of the question is how does Zillow do mortgage?

To further expand the conversation here is my take on Zillow’s move in to mortgage and some thoughts on what they could do to make a difference in mortgage lending.

What’s Wrong Right Now with Mortgage Shopping Online

1. Misinformation
2. No filter
3. Bait-and-Switch
4. Lack of Transparency

1. Misinformation. The primary problem with existing web-based lead generation is it’s based on luring consumers in with the best possible offer. This has unfortunately taken the shape of ads focused on how much money you can get for the least amount of monthly outlay. Those of us in the industry know that those ads are primarily based around the quoting of a negative amortization payment on an Option ARM; perhaps the most deadly of any type of home financing.

This misinformation does a couple of things. 1. It predisposes consumers to look for the “best” deal and equate “best” with “lowest monthly payment.” Unfortunately this also predisposes them to equate “best” with “most risky” in terms of loan financing. 2. It predisposes consumers to shop by looking at “lowest” everything, from rate, to monthly payment to fees; which we shall see, primarily predisposes them to choose lenders who lack scruples in their upfront mortgage pitches.

2. No Filter. Anyone with a buck to spend can get in to the lead game. Lead generators have no boundaries, and lead buyers only need to pony up the cash to buy leads. There is no filter. You don’t know where your information is going to, how many people it is going to and/or what the qualifications of those people are. Further you have little redress should anything go awry. Most lead providers are several steps down the chain; and lead-sale fraud is so rampant amongst smaller lead providers that you never really know where your information is going after filling out that web form.

3. Bait and Switch. The primary complaint with companies like BankRate.com who currently post interest rates from various companies is that consumer behavior dictates that lenders need to lie and be overly-aggressive on interest rate quotes to generate any return on their traffic. They pay monthly for the pleasure of being in the reddest ocean in the world; and to get a return on that investment they need to essentially over-promise so that you click through to their site. Once on the phone with them a loan professional will quickly advise you that you “don’t qualify” for that particular program.

This need for return on monthly subscription fees in the face of massive competition fuels that bait and switch which results in a miserable and confusing financing process.

4. Lack of Transparency. As I mentioned in #2 there is no transparency, no audit trail if you will, once you become a lead passed through the system. You’re gone and on your own in the wilderness with no fallback (except maybe to start all over and choose another rabbit hole). This lack of transparency about who the lenders are, where your information is going, and what is going to happen next are some of the big culprits in why online mortgage shopping is currently a crap shoot.

So we know what sucks with online mortgage do date. Let’s look at what Zillow currently does well; that will let us get some good ideas about how they might solve the problem of shopping online for a mortgage.

What Zillow does well

1. Consumer advocacy
2. Data Masters
3. Conversations
4. Unique Metrics

1. Consumer advocacy. Zillow is a firm believer in the mantra “a well informed consumer is a better consumer.” They’ve demonstrated this through the wealth of information available to consumers for the first time ever in an easy-to-understand format. They’ve added to that with a robust Real Estate Guide and a the new Zillow Discussions. This approach to consumer advocacy is evident in the very intentional way that information is presented and currated by the folks up in Seattle.

2. Data Masters. No matter what industry people say about the accuracy of the Zestimate the American homeowner ain’t listening. People love the Zestimate. For all its flaws, which it has no doubt, the Zestimate is the true disintermediation of real estate information. Never before could you get information about your home, your neighborhood and your region like you can today. This is a major breakthrough and one that the web-guys at Zillow get.

Unlocking the data, making it easy to understand and present it in a way that makes sense is what makes a good information distributor. Zillow is doing that and improving continually.

3. Conversations. Zillow has shown its commitment to social media through their staff interactions and marketing strategy towards the RE.net. They understand the power of convesations and fully embrace the influencer communication model. By communicating directly with influencers they are able to leverage a trusted 3rd party to disseminate their news with out having to shout it themselves. This strategy is cultivated even further by bringing influencers directly to their target audience in a virtual meeting place between sellers, buyers and professionals. The conversations held between these groups will continue to grow in meaning as the professionals realize that shouting from their stand in the bazaar is less effective than actually having a conversation with an engaged lead.

4. Unique Metrics. Zillow just recently added behavioral advertising capability to its web site. If you don’t think this is a big deal, think again. This is an incredibly important advance for Zillow; and another reason why “Web guys” have a shot at building a successful real estate and mortgage portal online. Behavorial metrics is the key ingredient for Yahoo! and other large properties in attracting the massive amounts of ad revenue that they do for various big brand advertisers. And we’re not talking just basic demographics here folks; on the back end of these systems is some of the most complex, insightful data you’ll ever see as it relates to B2C marketing.

These unique metrics will give Zillow an unquestionable advantage over the other lead gen properties.

What Works When Shopping for a Mortgage

So what does work when shopping for a mortgage? What might Zillow try to co-op or improve upon to own the mortgage lead-gen process? Here are a few things that tend to make for a successful mortgage transaction.

1. Expert advice
2. Relationship driven business
3. Offer Angel – understandable transparency
4. Upfront mortgage brokers?

1. Expert advice. The long (long, not lone) argument against online mortgage shopping is that you have no idea who you are dealing with. You could be talking to a mortgage broker of 15 years or an ex-con who just got done serving 15 years. This lack of expert advice and trust (Jillayne might say fiduciary relationship) is what a personal referral brings (usually) to the table in a mortgage transaction.

Having this expert (fiduciary-esque) advice is key to a successful transaction.

2. Relationships. It’s funny (or not) how little the mortgage industry has evolved on the origination end. (It also represents the great opportunity for Zillow.) The best way right now to get a mortgage is to get a referral from a trusted source; and then vett the referred significantly until you are comfortable with that service provider.

Take that relationship, plus some awareness and due diligence and you are in pretty good shape. Relationships are still key in this business – no matter what anyone tells you.

3. Understandable Transparency. Brokers complain to me all the time that consumers don’t care about honesty because they only look at rate and closing costs and don’t consider the big picture. I think that the complaines are half-right. The problem is not that consumers don’t care about the honesty; it’s that they don’t have an easy way of understanding or comparing offers (honest and not). The disclosure system has become such a complete mess that people’s eyes blur over before they get to line 3 of the first page (of 50). A system of understandable transparency; like OfferAngel.com where offers can be compared on their most basic levels in an easy-to-understand format make for better buying decisions.

4. Upfront mortgage brokers? I use a question mark because while I am not sold on the business model, I appreciate the idea. The idea that a fixed cost for the service is negotiated up front and all costs and fees are in plain view. This service is often decimated by a good bait-and-switch hack by over-promising and clinging on to dear life at the end of the transaction; however, this idea of upfront disclosure and a fair, negotiated price has some merit. Even if the implementation of such a model has proven less than perfect to date.

What is the Secret Mix?

So what is the secret mix that Zillow can use for its online mortgage platform to really revolutionize the way that mortgages are shopped for online?

There are some hints in the above which I think point to strategic areas where Zillow can leverage its strenghts to solve some of the weaknesses in the current system.

1. Transparency
2. Social media – wisdom of crowds
3. A twist on Zestimate
4. A true marketplace
5. Metric Mania

1. Transparency. If Zillow can “turn on the lights” in the lead gen process and give consumers a full view of the lead gen chain from who is getting their information and how it will be used; while giving them control over that process they will have taken a huge step forward in lead generation. This could, in one swipe, take care of a huge portion of what ills online mortgage shopping today. By giving consumers control over the process and clear visibility in to how it works they will build consumer confidence and become a consumer choice over the black holes that are LendingTree.com and others.

2. Wisdom of the Crowd. Zillow is building its community to a critical mass. While they continually work to pull traffic to the site in to a lasting relationship via discussions and other features they will add to a growing regular user base that will be able to act as judge and jury for those that abuse the Zillow property. By using social media to leverage the wisdom of their informed and passionate crowd Zillow can weed out unscrupulous mortgage originators and help maintain a high service level for all transactions that happen as a result of lead-gen at Zillow. The crowds will be able to control the destiny of mortgage originators.

Think ebay and seller and buyer ratings. Think Prosper and how their site is structured. Those two sites give you insight on how an offering could be built to protect the integrity of the service level by a high degree of transparency and feedback within the Zillow space.

3. A twist on Zestimate. Why can’t there be Zestimated mortgage rates and terms? Why do they have to be generated like BankRate.com? The answer: there can, and they don’t. Zillow can leverage some of the technology that lets them regionalize home prices to regionalize mortgage rates and service costs. Instead of letting brokers and banks put their own numbers up they can leverage regional data and various information sources to come up with their own Zestimated mortgage rate by region and more.

The beauty of this is that it doesn’t have the implications of a poorly Zestimated home value; because it will only act as a baseline to make for better informed shoppers. If you as a consumer have a better understanding of what is going on around you on a regional level you can have taken care of a large part of due diligence in finding the best rate (only one component of course) while not being a victim to the bait-and-switch environment that is bankrate.com.

4. A true marketplace. By combining their already keen ability to deliver complex data in an easy-to-understand format with understandable transparency (a la OfferAngel) they have the ability to create a true open and honest market place for consumers to shop for a mortgage. By “turning on all the lights” and making mortgage choices easier for consumers they can position themselves as a much stronger resource than other lead-gen companies which promise the unattainable in exchange for your information.

Imagine a place where you could clearly see your options in a way that makes sense, against the backdrop of a relevant market picture, with the help of the wisdom of the crowds. This could be a powerful space.

5. Metric Mania. Zillow will leverage behavioral targeting to improve the mortgage lead-gen process (which it surely won’t be referred to by Zillow folks) so that the latest in consumer metrics and measurement will be used to target mortgage-related marketing dollars and refine the overall user experience in the new mortgage space. This reliance on metrics will allow Zillow to go leaps and bounds over the companies that only use it to focus on lead capture; rather than overall process and experience improvement.

Conclusion

Zillow has a shot, and a good one at that, of revolutionizing the way that consumers shop for a mortgage online. It won’t be an easy task; and balancing the legal requirements of not being a mortgage company with the need to provide a safe, consumer-friendly marketplace will be interesting, but they do have the tools and the ability to change the way things are done.

Will it be done all at once? Doubtful. Will there be bumps in the road? Absolutely. Will some ideas fail? Surely. But if Zillow

combines its consumer advocacy and information pledge with process transparency and easy to understand information presentation it will have a distinct opportunity to set itself apart from the major competitors in the space. This will surely be a win for both consumers and mortgage professionals tired of the rabbit holes, bait and switch schemes and endless unfulfilled promises.

As a fan of consumer advocacy in mortgage myself – I hope they do it.

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Server Move Complete

Morgan — Thu, 09 Aug 2007 20:07:09 +0000

Hey everyone -

Thanks for hanging with us over the last couple of days as we?ve resolved our server issues. We moved from DreamHost (should be called NightmareHost) to a grid-hosted solution which supports big bursts of traffic like we?ve had over the last week.

No more downtime, slow site response, or unreachable pages – promise! So hopefully you?ll find the new site much faster and more responsive.

Please bear with us as we migrate some of the plugins and features from the old site to the new. It should all be wrapped up tonight.

Also, you may want to take advantage of receiving Blown Mortgage updates via RSS or email. You can subscribe to either via the links in the left-hand column.

Thanks for all of your support.

?Morgan

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