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Debbie Siegel's Mortgage Minute
The Truth about Mortgage Lending Websites
We all need reminders that if it something sounds too good to be true, it probably is -- and that includes enticingly named online mortgage lending sites.
Their commercials are cute, and they claim to "empower" the borrower. But scratch the surface and you'll find there is nothing cute or empowering about giving all your personal identity and financial information to an anonymous Website.
Online lending sites such as LendingTree.com, BankRate.com, and QuickenLoans.com are in the business of making money by selling names and personal information to mortgage companies. If you try one of these sites, you may live to regret it.
One of my clients tells the story of being hounded by mortgage companies looking for her business after submitting her personal information to one of the sites. Plus, her information was sold to other vendors who wanted to solicit business, too. (Think about all the personal financial data you give to apply for a mortgage!)
* Next 37 17 investors only!
In a blog post on the subject, I read about another man who is now getting harassing telephone calls at work from mortgage companies -- and Lending Tree, the company who sold his name, refuses to close his account!
Even if you think it's worth the risk to get a good rate, you'll probably be disappointed. In fact, Fortune magazine reports that 9 out of 10 customers who sign onto one of these sites end up getting mortgages from private brokers whom they found themselves. And, of those who do use mortgage companies from the site, only 15% return for another loan.
But, with their witty commercials and message of consumer empowerment, it's easy to be enticed. Remember, though, that bulging advertising budgets do not always translate to a good product. Even the tobacco companies produce glossy ads!
How can you protect yourself?
- Be skeptical. Ask yourself: If these sites are so wonderful, how come I don't know anyone who has used one successfully?
- Ask friends and family to refer you to a mortgage professional. Referrals are much more trustworthy than a random Internet search.
- Find a mortgage broker you like and trust, and build a relationship with him or her.
- Use the Internet for what it is good for -- learning important terms and how the mortgage process works so that you can be an informed consumer when you meet your mortgage broker.
Got questions about real estate financing? Contact
Debbie@westchester-mortgage.com
or 617-965-1236. She'll consider them for
inclusion in a future column. Debbie Siegel is president of Westchester
Mortgage in Newton, Mass. She is licensed in several Northeastern states.
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