California Mortgage Broker Unveils New Site to Ensure Lending Fairness
Jeff Lazerson’s dream - getting folks a fair deal on a mortgage – using the Internet - took five and a half years, reports the Orange County Register.
The California mortgage brokers‘ online service officially goes live today. It’s a shopping tool he claims will get borrowers a firm rate quote - not just rough, ambiguous offers.
The site, mortgagegrader.com, is a pushback to a dirty little secret in the mortgage game: It’s become almost impossible to comparison shop, and that’s never good for a consumer.
Mortgages are tough to digest for the mathematically challenged populace. An array of complex products makes most apples-to-apples calculations even trickier.
Very few figures offered by a mortgage calculator tell the whole story. Add in the once-frantic rush to buy property and the recipe for trouble formed. That’s especially true if you see the fat profits mortgage lenders make.
Numerous borrowers got pricier bad credit home loans when they actually could have qualified for cheaper prime mortgages. Lazerson insists his system curbs such abuses through the computer matching credit worthiness to the right product.
Other times, loan shoppers have picked an alluring initial monthly payment – and ignored the true costs of the loan. Some of that is the borrower’s fault, but some has been landers’ misguided or even unseemly behavior. Too often, folks who get an overpriced deal are minority and lower-income borrowers.
For instance, Countrywide Mortgage agreed to settle discrimination claims from New York’s attorney general, who alleges that the lender may have given that state’s black and Latino customers costlier loans.
Another mortgage behemoth, Wells Fargo, just launched a bilingual consumer education effort for its growing lending business for less-than-stellar financial profiles. This comes after Wells Fargo faced criticism about the fairness of this subprime mortgage program.
Lazerson thinks his MortgageGrader may cure some key fairness issues.
He says he’s not simply passing your financial profile out as a raw sales lead for lenders to respond to. He says his system gets a prospective lender only the data required to build a quote. That’s income, debts, credit profile and loan-to-value ratio - not personal details like name, ethnicity or even Social Security number.
Only after a banker decides to offer a deal -and it’s accepted by the loan shopper - do the full details of the borrower’s background get advanced to the lender.
Lazerson started this quest in 2001 by pondering ways the Internet could improve California mortgage lending. He’s not the first to use the web’s comparative shopper power, and his thesis - making the game fair and cheaper - can’t be argued with.
“Consumers got it in a second,” Lazerson says. “It was the industry that I had to convince.”
Lazerson couldn’t pull off his dream without cooperation of various lending sources to create a marketplace. Lenders were initially reluctant to sign on, fearing the newness and profit-slashing potential of the site.
Lucky for Lazerson, the mortgage game changed. All of a sudden, a new tool is worth a trial.
Lenders aren’t all bad actors ripping folks off, and considerable progress has been made getting non-traditional borrowers into mortgages they once couldn’t get. But work needs to be done to clean up the mortgage game and educating the borrowing public is a necessity. It’s not just the industry’s burden.