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“We’re in a situation now where a lot of people are concerned about their mortgages,” says Robert Cringely, a co-founder and shareholder in Home-Account. “There’s a lack of information out there and a lack of trust between consumers and their financial service providers.”
Home-Account is making a big promise: To bring transparency to the home loan process so consumers know where they stand, what the deal entails and what strategies might improve their financial situation to score the best mortgage. The price tag: $9.95 a month.
The company insists we’ll never have to worry about getting a loan we can’t afford or a bait-and-switch offer. There’s no fee for lead generation, no broker commission and no expense for the lender to participate.
The site makes the entire loan process digital and eliminates the need for a broker altogether. “The broker is there to make money. Your interests…are never aligned,” says Cringely. “We give recommendations and [customers] can choose to do it or not.”
Whichever loan you choose, Home-Account will then lock in the interest rate and deliver the paperwork to the lender (who is not paying the company for referrals, according to Cringley). “The whole point here is to serve homeowners…Anyone facing foreclosures or refinance or modification doesn’t feel like the lender is on their side.”
That said, the mortgage industry is attempting to improve some of its flaws. “Now all mortgage brokers must be licensed by each individual state, so that will weed out the less educated and scrupulous mortgage brokers,” says Dean Kessler, managing director of Manhattan Mortgage.
Beyond its algorithms and high-tech software to help customers find the best mortgage, the loan web site, which is backed by Silicon Valley angel investors and Charles River Ventures, plans to have a call center in the near future to help customers needing live help.
“A mortgage is the largest transaction one will typically ever enter into,” says Kessler. “Having had thousands of very involved conversations over the last 12 years with borrowers, I can attest to the fact that [finding the right loan] involves a back and forth conversation that can take many different paths.”
So far adoption has been quite impressive, with an average one new customer per second since the site went live last Monday. “We have 52 million potential customers,” says Cringely, referring to the number of current mortgages on the market. “If only 1% of them feel this is a good deal, then we only get 527,000 customers. That’s a pretty fair business."
—For the best rates on home loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.