Instead of responding to numerous emails I’m reducing my quick and dirty thoughts to this post… so please excuse the mortgage speak without detailed explanations and definitions…

Move created a mortgage ‘decision engine’ that effectively processes relative financial, credit and other risk based factors to generate mortgage rates, their costs, as well as subsequent pre-qualifications and approvals for consumers.  They simply tweaked a different loan qualification system and turned it into a mortgage specific version.   They’re a big technology company that employs smart people, so I’m sure they’re doing a good job with that.  Move then passes this neatly wrapped exclusive lead to Cornerstone Mortgage, the licensed mortgage banker who processes the rest of the required paperwork and closes the mortgage with the borrower.

I’m sure they’re are all sorts of reality TV worthy details to air, but I don’t know nor do I care about Move and Cornerstone’s internal business relationship or how their offering screws with a given real estate brokerages internal lenders (since Move is integrating this mortgage tool with listings provided from real estate brokers & their MLS’s).

Automated mortgage qualification/decision/approval engines have been around for over 10 years, initially only used internally by those in the mortgage industry.  This class of technology has increased in efficiency and ease of use to the point where a slightly tech savvy consumers can now effectively ‘qualify’ themselves for a mortgage.  As such, mortgage lead curators like Google (Comparison Ads), Zillow & Lending Tree as well as bankers like DiTech and Quicken Loans have used variations of what Move is providing for quite some time… all in the name of capturing the Internet mortgage consumer.

The main degree of differentiation in Move’s offer to the general consumer is the exclusive relationship with a single mortgage banker, Cornerstone, allowing the pairing to monitor and control the consumer experience much more efficiently.  I suppose their user interface is real nice and fresh too.  Otherwise you’re not likely to find anything new or novel about MortgageMatch.

Let me explain in terms that are easier to understand, in dollars and sense.

Below are the rates & costs for a given scenario (highest credit quality, provable income and assets, low risk loan & property factors) on Mortgage Match:

MortgageMarket Rate and Program Quote

Points to note:

• 309,000 Loan Amount
• 4.5% interest rate
• Fee for 0.750 point = $2317.50
• Lender Fees & Closing Costs = $6060.20

Next are two examples of what was available directly from the wholesale market using the exact same given scenario- High quality borrower and property qualification factors, in the same zip code for the same 30 year fixed interest rate within minutes of pulling MortgageMatch’s quote.  (I can’t tell you who’s providing the info so as not to compromise my sources, however, table B references what was available from Citibanks wholesale division earlier today… do not call Citibank and ask for their wholesale department, they don’t deal with consumers directly):

A. Large Mortgage Banker Direct Pricing

B. Direct Wholesale Rate Mortgage Pricing

Please draw your attention to the 4.500% interest rate in each table.

In table A. the price next to the rate is 100.706.  In table B. it is -0.721%.  Two different formats but similar results that state this 30 year fixed 4.5% interest rate will yield or pay .706% and .721% (respectively) of the loan amount to the borrower.

Let me make this even clearer.

The price in Table A  yields or pays $2181.54 to lock this 30 Yr-Fixed 4.5% interest rate.   Borrower must still pay 3rd party closing costs.

The price in Table B yields or pays the borrower $2227.89 to lock this 30 Yr-Fixed 4.5% interest rate.  Borrower must still pay 3rd party closing costs.

In MortgageMarkets offer, they are charging the borrower .750% of the loan amount or $2317.50 for their 30 Yr-Fixed 4.5% interest rate.  Borrower must still pay 3rd party closing costs and additional Lender Fees.

So, MortgageMatch is really making ~$4500.00 plus additional Lender Fees, not 2317.50 plus additional Lender Fees (and 3rd party closing costs).

That’s expensive.

For me, its always been about unfiltered access to wholesale mortgage rates, directly from the source, subject to no manipulation by any 3rd party… pure information of the highest integrity… radically transparent.  Good customer service is expected, I want to know exactly what rates I qualify for and at what cost.  I want to pay a fair, clear fee for value received from a mortgage professional.

Show me what I truly qualify for and set the fee to process my mortgage in simple dollars rather than ambiguous ‘points’ that have nothing to do with the interest rate.  If Joe Mortgage charges $2000 and John Mortgage charges $4000, John has to justify his larger fee with a tangible explanation and he’s gotta back it up with references.

This dynamic still does not exist in the marketplace and until it does all these ‘new’ offerings are doing nothing but increasing the velocity of the same old convoluted, untrusted mortgage model.

I really look forward to the day when the greater mortgage industry implements technology and practices that comply with true full disclosure policies rather than financial charades.  In the meantime, if you need a reference to a mortgage professional who discloses things as I’ve described, hit me up.

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Move Launches MortgageMatch- Same Cat, Similar Spin