Nationwide Home Mortgage Loan Company

Long ago mortgage websites on the web were merely placards and billboards for brick and mortar established mortgage companies and were very rarely seen. A little known company called Lending Tree changed mortgages online and offline forever with their revolutionary approach to mortgages.

 It is nothing short of miraculous how many mortgage companies have since then adapted the Lending Tree business model as their central point of contact with their customers. Since those early days the internet has virally exploded with copy-cat websites promising that you can get your best deal by filling out one application and having multiple mortgage lenders compete for your business.

 We at lendfast believe that most consumers might be surprised by exactly what takes place when you hit the submit button on one of these applications. We also believe that this business model has run it’s coarse as far as being the best way to get a good deal on mortgages.

Imagine you have just filled out one of the applications online that advertises, “have up to four lenders compete for your business”. These lead generation web sites typically have two types of forms. They are referred to as a “long form” and a “short form”. The short form promises information like interest rate quotes or house values, where the long form typically gets all of your personal information.

Either way, once you hit submit your personal information, social security numbers and all, are instantly transmitted to four companies that each pay fifty bucks for the chance to speak with you. Some lead generation web sites sell and resell your information indefinitely, specifically the short for applications. You are now a lead. You can expect the following:

• Your phone will ring no less than 4 or 5 times from every lender they have sold your information to. The loan consultants are taught by the lead propagators to do this for a week until you pick up. Each company competing for your business is more or less using the same business model and quoting the same rates and closing cost.
• Four salesmen across the nation now have your personal information, regardless of their ability to reach you or help you. You will have to speak to all four of these lenders or suffer the phone calls and emails for at least a week. Once you choose a lender, you now have to “break up” with the other three or suffer the fate of another week of phone calls and emails.

The larger lead propagators teach persistence to the companies they deliver leads to. Why? Because the largest of them get a funding fee paid to them once you close by the lender they referred you to. Most mortgage companies close one out of ten of these leads, that’s $500 bucks per loan in lead fees, also add a funding fee paid to the lead propagator and your mortgage lender has a tidy sum in overhead, guess who pays the overhead?Why would someone put himself or herself through this ordeal?

Simply put, mortgage consumers have become lazy. We would rather fill out one short form and have all the lenders fight over who is going to give us the best deal. The truth is all of those companies competing for your business have very similar business models.

Having four lenders with similar business models compete is analogous to having four Krispy Kreme doughnut stores compete for the lowest doughnut price. Each one would start with a high price for their doughnut and eventually one would drop a penny or two to sway your decision.

All mortgage companies have base line profit they need to maintain in order to stay in business and remain profitable. It only makes logical sense for them to begin their conversation with the highest profit margin so that they can come down when they are competing against other lenders. Dropping price and rates create the illusion of a good deal in most borrowers minds.

 Most lenders “buy their money” from essentially the same people. So getting your “best deal” from equally matched lenders using the same business model is merely an illusion perpetrated my millions of advertising dollars that have us convinced that we get the best deal when multiple lenders compete.

Lendfast.com believes that if you are going to do that much work trying to get your best deal, why not do the work up front? Once you learn our concept of negotiating profit as opposed to the traditional start high and see who will go the lowest method you will be amazed at how much money you can save.

You can also apply with lenders that specialize in your specific mortgage niche with confidence you will get the best deal.Mortgage companies these days have begun to hang their hat on certain types of mortgage products. By doing this are become more competitive with certain types of borrowers, such as self employed or bad credit borrowers.

We believe that in order to get your very best deal on your mortgage you need these few ingredients:

• Have the knowledge of which lenders specialize in you particular loan.
• Knowing the true cost associated with closing a mortgage.
• Know what is a fair profit margin for your specific mortgage.
• Know how to negotiate this with the lender

We teach this in our mortgage tutorial here. The way we see it at Lendfast, you can spend your time running from or fielding phone calls from multiple lenders, or spend a few minutes up front to learn about the mortgage you are contemplating. Either way you are going to spend some time working on your loan.

Tags: Discussion, Editorials/Articles, Mortgage Tips

This entry was posted on: Saturday, June 7th, 2008
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