The new regulatory structure in place to oversee the mortgage lending business is already changing the way our industry does business. But with only about 750 staffers working at the Consumer Financial Protection Bureau so far, the new bureau is just getting started. One thing I expect to see if a much greater emphasis on borrower satisfaction. After all, the CFPB is already wired to accept complaints from borrowers, but still building communication channels with industry players.
This will likely manifest itself in more borrower-centric portals. We're already seeing more of these on the servicing side, as servicers try to improve service levels before the CFPB sets new standards for their operations. Recently, I heard about something new coming to the origination side.
Nail Your Mortgage, Chicago, is using a proprietary mortgage technology solution it developed to put the power to get an accurate loan quote into the hands of borrowers without building a portal. PocketQuote™ provides fully-automated mortgage quotes that consumers can generate anonymously, for free.
“This is a major step toward giving consumers total control of their mortgage process,” said Mark Pickett, Nail Your Mortgage CEO. “At Nail Your Mortgage, we believe that consumers, empowered with the right information, can decide exactly what mortgage is right for them. With PocketQuote™, we’re challenging the status quo in an industry that has historically left consumers in the dark about how to make decisions regarding their mortgage.”
I'm not sure that lenders will be able to fall back on the borrower's own views of a financial product that really was "right for them," especially if these borrowers later experience financial difficulty that sends their mortgage into default. Still, in a world where the government is pushing a more borrower-centric financial services industry, it makes sense to get borrowers involved on their own as early as possible in the process.
According to Pickett, PocketQuote™ shows real, up-to-the-minute rates and fees based on information provided by the consumer and not the ‘teaser rates’ so common in the industry. Pickett says the quotes will be accurate, despite the fact that they are based on information the borrower supplies.
According to the company, Nail Your Mortgage connects consumers and wholesale lenders directly to each other, through an easy-to-use web application. Wholesale lenders are able to offer their mortgages at wholesale interest rates with zero margin or markup and consumers are able to see all information affecting the rate and fees quoted. Finally, Nail Your Mortgage allows consumers to manage the entire mortgage process online. A document management feature allows consumers to handle all their paperwork online, while an auditing platform enables consumers to monitor the progress of their mortgage application without phone calls or emails.
As far as I can tell, Nail Your Mortgage charges borrowers a flat fee for the origination of their loan and acts as a broker for the wholesale lenders that use its system.
“When consumers ask about today’s rates, they’re really asking, ‘What would it cost to refinance my mortgage or buy a new home?’ They’re not looking for teaser rates and shouldn’t have to pay a $300 application fee just to get accurate information," Pickett said. "And they don’t want to be spammed or hounded by brokers. To that we say get a PocketQuote™ and use our online scheduler when you’re ready for us to contact you.”
That's definitely a step toward putting the borrower in control and will likely be viewed favorably by future regulators.