Archive for June, 2008
Captains Log, Stardate 6272008…
June 27th, 2008 Categories: General
Crazy week meeting and talking to the typical disparity of lovers and haters in the quest for mo-better, accurate access to mortgage information…In any case, I’ve made the acquaintance of some very progressive people in and around this space and looking forward to announcing some affiliations in the coming weeks leading up to Inman Connect San Francisco.
Our beta group is almost full, we’ll be making proper announcements soon.
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Most common question/statement/epiphany of the week: You can provide agency guideline specific pricing????
Yes. While not perfect yet, RateSpeed is the only application of its kind (to our knowledge) that will take into consideration Conforming, Alt-A and Sub Prime (FHA very very soon) agency specific guidelines when returning a rate and pricing quote.
Why is this important? Accuracy and choice. Many other pricing engines only consider a few pieces of criteria when searching for and returning loan quotes, which can be misleading or lead to undeliverable pricing quotes, or they simply return ‘no results’.
Why don’t other applications (pricing engine companies and similar products) provide this level of detail? Not only do rates change daily (as often as 3 times) but program qualification guidelines change very often too. The sheer magnitude of data that needs to be updated and maintained is simply too prohibitive for others to deal with. In other words, they can’t…so don’t settle for a watered down version of a transparent mortgage program, rate and pricing search engine. Remember: You get what you pay for…
Thought for food:
Real estate professionals love the idea that they can feature RateSpeed on their sites too…If you’re a mortgage professionals looking for a way to differentiate yourself in the industry, streamline your business processes and maximize your marketing reach, apply here and we’ll help you spread your seed…
Back to my cave…
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I Submitted My Information, So Whats Next?
June 20th, 2008 Categories: General
We ’soft launched’ a working demonstration of the RateSpeed application late Monday afternoon and it’s created a storm of activity and opinion from those in and outside the industry. If anyone’s interested in reading a mile long comment thread thats far more interesting than the post, click on over to Active Rain.
There is such a love/hate relationship over this little application. While the love is great, its the hate that fascinates me. Hearing the virile comments from those in the mortgage industry reminds me of what happened in the real estate industry when greater access to property listing data was feverishly debated. RateSpeed is similarly akin to cracking open Pandora’s Box in the mortgage industry for consumers and professionals…opening Pandoras Box always sets off fireworks and usually changes how people percieve a given reality…once open, its almost impossible to close.
So what’s next? Well I didn’t plan on such a flurry of activity and interest so quickly. The plan was soft launch, contact some well respected folks in the mortgage industry get their opinion and see if 25 of them would like to take part in a Beta test over the next week to ten days. We would run the beta period for about 4 weeks, collect some invaluable feedback, make some adjustments in how the application worked and then do a formal launch. Well, I’ve been contacted by far more than 25 interested parties, ranging from the individual mortgage broker to technology companies to real estate agencies all inquiring as to how they can get involved with the RateSpeed initiative on too many levels to discuss at this time.
At this time on Friday, June 20th the plan moving forward is to go through the database of interested parties over the weekend and begin to select our 25 beta testers. I’ve already got a few hand selected with verbal commitments and will announce who they are starting Tuesday of next week. If you’ve submitted your information via the site or email, thank you, I’ll be reaching out to each one of you very soon. If you are not selected as a beta tester please don’t take it wrong, this wont be an easy process for me with so many quality mortgage professionals expressing interest, I just ask that you be a little patient and welcome the chance to be amongst the early adopters when we hard launch.
On a different level, a very common question I get is: What happens when I provide my (email) information to RateSpeed?
It’s privately filed away on our secure servers, so don’t expect a call from a mortgage professional or anyone else for that matter. We do not, will not sell or disclose your information to anyone. The application running on the www.ratespeed.com site is redisplaying rates and pricing available on the wholesale market so consumers, mortgage professionals and real estate pro’s can get a feel for it’s accuracy. It’s basically out there so everyone can put it and the quality of information it returns to the litmus test. So far, so good. I’ve had dozens of licensed mortgage professionals contact me and verify that what is being displayed is exactly the same information they receive from their wholesale or correspondent relationships and can deliver. Huzzah!
Anyways, its been a long week. I need a beer.
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Wholesale Lender, Program and Pricing Results For RateSpeed Licensed Mortgage Professionals
June 19th, 2008 Categories: Mortgage Professionals
Below is a screen shot from an email a RateSpeed licensed mortgage professional would receive when a consumer hits the ‘Buy Now’ button next to any of the rate rows on the results page.
The blue hi-lighted row is the ‘Buy Now’ choice the consumer made. As you can see the mortgage professional can quickly discover exactly what lender that they are approved with is offering the best rate at the best price for any given scenario. In this case, Chase Wholesale happens to be offering best case pricing at 5.500% while Flagstar prices best for the other rates.
Consumers are not shown who the wholesale lender is, this is up to the mortgage professional to disclose. We didn’t want to create the chaotic confusion of consumers trying to (unsuccessfully) usurp the mor-pro and attempting to call either a wholesale only lender or someone like Chases Retail side saying they ’saw this rate’. Most consumers don’t understand that lenders have a wholesale and retail side and they have little to do with each other, i.e. the retail side can’t deliver the wholesale sides pricing and wholesale doesn’t deal with ‘the public’…well, now they do.
We also didn’t want other mortgage professionals abusing a licensed RateSpeed affiliates site by trying to price their own customers…get your own license stingy! Along that thread, consumers should be aware that only the mortgage professional running RateSpeed on their site can deliver the rates that are returned. Remember, the application is specifically tied to that professionals lender database, so getting a quote here and then calling some other outfit demanding a rate you saw on a RateSpeed pro’s site is probably not going to bear fruit, is kind of disingenuous, and opens one up to bait and switch tactics.
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Release Early and Often
June 17th, 2008 Categories: General
I’m a serial entrepreneur, afflicted in worst and best of ways. One of the issues I’ve struggled with through my ‘career’ with is exactly when to roll out a business service or product. ‘It’ (whatever ‘it’ may have happened to be) is never ready in my head, there’s always something that can be done to improve or refine for the better. With the RateSpeed application, never have I been more conflicted in these terms.
Part of the problem when you are so passionately attached to something…working, living, breathing it day in and day out…is that after a awhile eveything begins to run together, it all looks the same and decision making can become very difficult. ‘Do we roll it out now, or after XYZ are done??’ While it’s a little unnerving, our plan is to release early and often.
RateSpeed is very ‘alpha’, if you will, compared to what the User Interface (UI) will look and act like in the near future, but it does the one thing that it’s supposed to do very well; Searches and returns best case mortgage rates and pricing direct from the wholesale lender market without any ability for inflated margins or otherwise manipulated information. The data flow is pure, transparent and therefore extremely credible. This is the most valuable and important aspect for consumers and mortgage professionals given the current state of affairs in the maligned mortgage industry.
Everything from look and feel to functionality and expanded integration of 3rd party data, RateSpeed will consistently evolve and improve with each iteration. I’ve received a considerable amount of great feedback from well respected professionals and am already in the process of implementing some of the viable suggestions. Offering a wide variety of program types (50-40-30-20-15-10 Yr Fixed, 3-5-7-10 Yr ARM’s and an interest only options) to choose from on the submission page is one of the first functionality updates you’re likely to see. A consumer will be able to select up to four program types per search.
To further this dynamic, in the coming days we’ll be launching our campaign to enroll 25 beta testers in the RateSpeed program. They will be hand selected and offered a considerable amount influence as to how the application evolves; I really believe in the wisdom of (wise) crowds. If you would like to be considered for a beta license click here.
For anyone who is submitting their information to RateSpeed and requesting their rates be emailed, hitting the ‘Im Interested’ or Buy Now tabs, your information falls into my inbox, to which I share with no one. We uphold the strictest of privacy standards. I’ll keep it this way unless you expressly state you want me to refer you to a mortgage professional, which I shall do gratis.
Neither I nor this company charges for leads or referrals and we do not originate loans. This allows us to stay extremely objective in our approach to providing the information that we do, on behalf of the transparent mortgage professional and for the consumer. Once we have our beta group in place, consumers will be directed to the websites of RateSpeed licensed mortgage professionals running the application and servicing their local area.
Thanks to everyone who has submitted feedback, offered support and kind words of encouragement towards changing the mortgage industry for the better, for everyone.
JeffX
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Real Time Wholesale Direct Mortgage Interest Rates for 6/16/08
June 16th, 2008 Categories: Conforming Wholesale Mortgage Rates
What you see above is a screen shot from a results page generated by RateSpeed at 1:41pm on 6/15/08.
The risk based credit, financial and property criteria used to generate the above quote is as follows:
Purchase, Primary Residence, Single Family Residence, Fully Documented income, Debt to Income <39%, Loan To Value <80%, $400k Loan Amount, 700 FICO score.
Don’t believe what you see? Try it out yourself.
Shortly, RateSpeed will be enrolling 25 mortgage professionals as beta testers. Stay tuned to see how you can be one of the early adopters in the transparent mortgage revolution.
Defining the fields and columns above:
Conf 30 Yr Fixed.
This is the term of the mortgage program. In this case the program is a traditional conforming 30 year fixed mortgage product.
Rate.
This is the interest rate of the loan.
APR, in this alpha rendition, will only account for the Broker/Banker Fee. Traditionally it will (and should) include all closing costs. IMO APR is confusing and manipulatable.
Loan Amount.Self explanatory, the dollar amount of the mortgage.
Monthly Payment.
How much you would pay the mortgage provider each month. Includes principle and interest.
Price.
This is the % cost or rebate that the given interest rate yields in the wholesale market. The Loan Amount is multiplied against the Price to equal the dollar ($) amount in cost or YSP credit.
YSP Credit.
RateSpeed is about choice and displays five levels of Price, one Price below Par (a Par rate is the lowest interest rate a borrower qualifies for, given by the wholesale lender) and four above Par. The higher Rate one chooses above Par the more YSP Credit (or cash rebate) the consumer may receive and apply toward closing costs (Broker/Banker Fee and 3rd Party fees, i.e. appraisal, title, escrow, home inspection etc). An interest rate below Par will cost a consumer to acquire, often times called ‘buying down’ an interest rate.
In the above 30 Yr Fixed, $400k Loan Amount example:
6.25% would yield $1084.00 in cash from the wholesale lender to the consumer to be applied toward closing costs.
6.625% would yield $5844.00 in cash from the wholesale lender to the consumer to be applied toward closing costs. The first $2000 would pay the Broker/Banker fee and the rest may be applied toward 3rd party closing costs (in this scenario).
Broker/Banker Fee.
This is the (negotiable) flat fee the mortgage professional is charging to close this loan. It is completely up to the mortgage professional what this fee ultimately is, RateSpeed does not mandate what a mortgage professional can charge.
$2000 is what we chose to represent as the Broker/Banker fee in this example and should not be interpreted as what all licensed mortgage professionals may charge who offer RateSpeed to their clients. The fee may be more or less, completely dependent on the mortgage professional, but always disclosed up-front.
Net Cost.
Net Cost = Broker/Banker Fee minus (plus) YSP Credit (cost).
Using the same qualifying information, compare and contrast the rates and pricing you see above to other mortgage websites and similar applications and you will quickly see the difference between a transparent mortgage professional who offers RateSpeed and those who don’t…unabated access to real time, best-case wholesale mortgage rates and pricing.RateSpeed: Enabling mortgage consumers and professionals to make smarter decisions with better information.
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RateSpeed Beta Version 1.0 Asset Field
June 16th, 2008 Categories: General
Releasing applications in versions is common in the world of software and RateSpeed is no exception.
While RateSpeed v1.0 does what it’s intended to do, very accurately redisplay 100% transparent wholesale mortgage interest rates, there are a few aspects of the application worth noting that will be updated in subsequent releases, which will come early and often.
The Asset field on the Submission page will soon be broken down into:
- Checking/Savings
- Stocks/Bonds/401(k)
- IRA/Retirement
Currently the Asset field is static and any subsequent quotes assume assets in the above accounts equal at least:
- 2X Mortgage Payment for a Primary Residence.
- 6X Mortgage Payment for a Second Home or Investment Property.
All RateSpeed version releases will be announced here on the blog so be sure to subscribe to the RSS Feed.
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RateSpeed, The Mortgage Rate Search Engine
June 13th, 2008 Categories: General
As a company RateSpeed probably looks like another mortgage interest rate quote internet site, proposing some grand solution thats ultimately a new skin on an old cat.
I imagine most brokers and bankers also smell another company looking to carve out a pound of flesh for itself, cut out the individual professional, or sell ‘leads’. For anyone that isn’t in the know, LendingTree charges used to charge $10,000-$25,000 just to sign up for the privilege to then pay for their leads plus additional fees if the loan closes. When broker/bankers ‘compete’ on Lending Tree, they must pass on these costs to the consumer. Similar things can be said about most all other Lead-Gen companies. It’s a fledgling (at best) and increasingly cost prohibitive business for mortgage professionals to use and subsequently consumers to pay for. As the saying goes, Shi* runs downhill 
Quite simply RateSpeed is a rate.bot that can crawl and extract best case interest rate pricing results from a mortgage professionals existing broker/banker relationships.
More specifically, the software can crawl multiple disparate feeds provided by any number of wholesale mortgage providers, essentially allowing a broker/banker to submit a borrowers qualifying and anonymous risk-based criteria to a single point of entry, yielding best case results. Broker/bankers are often ‘approved’ with dozens of lenders, actually ’shopping’ an individual borrower to this many resources is time and cost prohibitive. RateSpeed prices every lender in seconds, insuring all resources are considered and transparently displayed.
Consumers shall have access to the exact same RateSpeed interface and information that our affiliated broker/banker does. No more bait and switch, smoke and mirrors, or wondering if one really got the best deal they could. Par rates and yield spread premiums will be there for all to see. As is often said in the mortgage world, ‘we all have access to the exact same rates and programs’, its how well one can sell themselves or their company. Mortgage professionals that utilize our RateSpeed enabled sites will be looked at as transparent service providers, instead of Salesman.
RateSpeed will not be cost prohibitive. We shall not charge a per deal or referral fee. Any ethical, transparent broker/banker should be able to afford our products.
With great power comes great responsibility (Thx uncle Ben). By providing the mortgage professional community with a powerful and time saving tool we are mandating they share it with their potential clients. Consumers will see exactly what the professional sees, total unabated transparency. Our subscribing broker/bankers will have no ability to manipulate the information before a consumer sees it and they adhere to a flat fee cost for services policy, disclosed up front, and verified via the funding lender.
We hope to raise the baseline of what constitutes a good mortgage away from interest rates and cost (since ‘we’ all have access to the same candy bag) and more towards qualified, efficient service. Alas, the technology won’t be for everyone, i.e. many broker/bankers will condemn it as some sort of heresy, while others will tell their clients that they already practice such ethical standards. At the end of the day, there’s really only one way to know.
Who will the increasingly discerning and educated consumer trust? The broker/banker who must say ‘Trust Me’, or the one who doesn’t need to blow such smoke?
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The RateSpeed Lender Stable
June 13th, 2008 Categories: General, Mortgage Professionals
Although RateSpeed has the unique ability to configure most any wholesale lenders rate pricing feeds into the application, below is a list of quality lenders currently in our ’stable’ and available for immediate implementation:
1st Advantage Mortgage Wholesale
Alternative Mortgage Express (AMX)
Astoria
Cendant/PHH
CitiMortgage
Coastal Funding
Columbia Bank
Everbank
Fifth Third Bank
First Advantage
First Horizon
Flagstar
Franklin American
HSBC
ING Mortgage
Investor Savings Bank (ISB)
JP Morgan Chase
Liberty Mortgage
MSI 3
Provident Funding
RMC Funding
Senderra
Sovereign
Taylor Bean & Whittaker
The Provident Bank
Valley National Bank
Wells Fargo
Updated 9/8/2008…
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Top Ten Reasons Why A Mortgage Professional Should Use RateSpeed
June 13th, 2008 Categories: Mortgage Professionals
Top Ten Reasons Why A Mortgage Broker or Banker Should Use RateSpeed.
- Bend transparency into your advantage instead of a burden.
- Consumers get to play ‘What’s my Rate Today?’ without bothering you.
- Instant ‘Credibility Juice’.
- Real estate professionals will be able to put it on their site too, this expands your marketing reach.
- Increase your website traffic, huzzah!
- Watch your mortgage rate market in real time.
- It’s the ultimate organic lead generation tool.
- It’ll scare the crap out of your mortgage friends who aren’t using it.
- You’ll be ‘Cutting edge’ and ‘Innovative’.
- Pretty soon, consumers wont deal with a mortgage professional that doesn’t.
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The Inherent Benefits of RateSpeed for Mortgage Professionals
June 13th, 2008 Categories: Mortgage Professionals
The number one question I’m asked when discussing RateSpeed with mortgage and real estate industry pundits is:
Why would a mortgage professional want to use RateSpeed?
It’s a reasonable question, to which I generally answer making the following points:
- RateSpeed configures an individual mortgage professionals multiple wholesale lender rate pricing feeds into one application, allowing them to input the ubiquitous credit, financial and property pre-qualification information once to shop and return best case program and pricing results. This saves the mortgage professional valuable time rather that having to do the same multiple times for multiple lenders.
- Consumers are voyeurs. They like to shop, ‘kick the tires’ and otherwise access what rates they (may) qualify for without calling a mortgage professional and giving up their information. Mo-pro’s spend inordinate amounts of time catering to consumers who are ‘just looking’, don’t qualify or otherwise don’t want to deal with a human being. RateSpeed allows the mo-pro to focus on the clients who want a mortgage now, allowing RateSpeed to cater to the ’shoppers’.
- Since RateSpeed redisplays a mo-pro’s wholesale direct interest rate pricing feeds, consumers know that they are receiving the very best of what a mo-pro has to offer. Being 100% transparent with your information and business builds instant credibility and trust with a consumer who is ’shopping’ on your site without having to ’sell’ this proposition in person.
- RateSpeed is a sticky lead generation application for mo-pros. While a majority of consumers who use the application won’t need, qualify or retain you for a mortgage, the individuals who do contact you are buyers, ‘the good leads’ if you will, they’re asking buying questions…Obtaining a mortgage client has always been a numbers game, you must ‘touch’ a certain number of consumers before you convert one to a client. RateSpeed allows you to touch huge amounts of consumers that would otherwise pass you by, and most importantly delivers motivated clients with great efficiency.
- RateSpeed allows the mortgage professional using the application to wield transparency to their advantage. Many mortgage brokers (rightfully) feel they are being treated unfairly with the legislation and disclosure laws that require them to disclose certain fees while their mortgage banker cousins are afforded the ability not to disclose. Once a consumer sees what is truly available to them, and more importantly who is providing this information to them, Pandoras Box is open. It’s a matter of time before consumers demand transparency and RateSpeed delivers it with accuracy and efficiency.
- Running a flat-fee compensation model is far less confusing to a consumer and protects the financial interest on the mortgage professional by establishing compensation regardless of frequent rate fluctuations.
- RateSpeed runs as a link within a mortgage professionals website, allowing you to maintain your branding and keep consumers on your site.
Differentiate yourself and your business by adopting a progressive transparent model, one that can future proof your business for many years to come.
There are those who talk it and others who walk it. Which one are you?
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