4 ms·

The other wrinkle is that vendors don't want the broker to control the relationship. They want to have it themselves. So a big part of why companies like Lendin

by Kalium 4y ago

The other wrinkle is that vendors don't want the broker to control the relationship. They want to have it themselves. So a big part of why companies like Lending Tree can exist is because they sell the leads and don't have to do the work of being a CRM.

6510 4y ago
They don't have to give up control, if the offer is appealing they can consent to further contact.
- bluGill 4y ago
  control is all they have though. Big banks are behind the scene doing all the real work. All the people you talk to are doing is getting a contract signed. There are enough steps that this is valuable work that needs a lot of customer service (which is why big banks outsource it to 'independent' entities), but in the end nobody can actually give you a better rate/extra costs from the banks and credit unions already near you. The rate you care about is decided by your credit score and the current market. The closing costs are somewhat competitive, but they are in the end small. I suppose if you have really bad credit these places might find someone willing to do a risky loans (at really bad interest rates) while the local banks and credit unions won't talk to you at all. However overall the places buying leads don't have anything to offer.
  - horsawlarway 4y ago
    Yup. Too few people understand that almost all of these companies are solely loan origination and loan servicing. They are not providing the capital, they are not making money through interest. They have almost no control over the rates they offer you. They make money when a borrower signs a new loan agreement (origination) and by collecting the payments the borrower owes and passing them along to the real lender (servicing). If you're wondering why your mortgage company used to keep calling you telling you to refinance (and some still are, even with the higher rates), it's because that's another loan origination for them - another payment. They don't care that you save long term on the interest, they want the payment for closing a new loan. Same for loan consolidation (ex: consolidate your auto/credit debts!) style pitches. They're ONLY interested in originating a new loan, because that's how they get paid. ---- Basically - these guys don't have anything other than you, the borrower. They're not selling you a loan, they're selling you to real lender, which is almost always the large government backed mortgage lenders (Freddie/Fannie). This is why they jump to call you, or text you, or harass you. They are out there fishing for new borrowers to make money.
- Kalium 4y ago
  In their minds, if they do not have contact info they do not own the relationship. If the broker has that, the broker owns the relationship. Making an offer through a broker means making an offer where they do not own the relationship. In short - you are defining control differently than they do and coming to a different conclusion. You can do that, but expect vendors to be unmoved by it.
  - klyrs 4y ago
    I think 6510 was proposing that the broker would present the smorgasbord of offers to the client, and after the client selects an offer, the lender would get the client's contact information. The lender would own their relationship after the client consents to that solitary relationship.
    - Kalium 4y ago
      I understood what 6510 was proposing. My point is that the lenders consider this to be them not owning the relationship and it requires the broker to do all the CRM work. Neither sees the smorgasbord approach as good for them. Could it be done that way? Sure! This just comes with the caveat that finding lenders willing to do it might be harder and they would likely pay less per-lead. So a higher volume would be required to make financial ends meet for the broker, who also is now developing and deploying more sophisticated software in addition to the whole sales funnel and marketing operation. You may be thinking "Gee, this is great for everyone except the customer". Yes, it is. It sucks for the customer who gets spammed by a dozen lenders.
      - klyrs 4y ago
        Right. Lenders and brokers want to exploit the customer for maximum profits. They do not want to respect customers, because they might make a little less money and it might take a bit more effort. The customer does not like that behavior, but an unregulated market rewards the worst actors so the customer cannot find what they would really want and is forced to settle. The FCC is supposed to protect the customer and regulate the market in this situation.

by Kalium 4y ago

6510 4y ago

They don't have to give up control, if the offer is appealing they can consent to further contact.

bluGill 4y ago
control is all they have though. Big banks are behind the scene doing all the real work. All the people you talk to are doing is getting a contract signed. There are enough steps that this is valuable work that needs a lot of customer service (which is why big banks outsource it to 'independent' entities), but in the end nobody can actually give you a better rate/extra costs from the banks and credit unions already near you. The rate you care about is decided by your credit score and the current market. The closing costs are somewhat competitive, but they are in the end small. I suppose if you have really bad credit these places might find someone willing to do a risky loans (at really bad interest rates) while the local banks and credit unions won't talk to you at all. However overall the places buying leads don't have anything to offer.
- horsawlarway 4y ago
  Yup. Too few people understand that almost all of these companies are solely loan origination and loan servicing. They are not providing the capital, they are not making money through interest. They have almost no control over the rates they offer you. They make money when a borrower signs a new loan agreement (origination) and by collecting the payments the borrower owes and passing them along to the real lender (servicing). If you're wondering why your mortgage company used to keep calling you telling you to refinance (and some still are, even with the higher rates), it's because that's another loan origination for them - another payment. They don't care that you save long term on the interest, they want the payment for closing a new loan. Same for loan consolidation (ex: consolidate your auto/credit debts!) style pitches. They're ONLY interested in originating a new loan, because that's how they get paid. ---- Basically - these guys don't have anything other than you, the borrower. They're not selling you a loan, they're selling you to real lender, which is almost always the large government backed mortgage lenders (Freddie/Fannie). This is why they jump to call you, or text you, or harass you. They are out there fishing for new borrowers to make money.
Kalium 4y ago
In their minds, if they do not have contact info they do not own the relationship. If the broker has that, the broker owns the relationship. Making an offer through a broker means making an offer where they do not own the relationship. In short - you are defining control differently than they do and coming to a different conclusion. You can do that, but expect vendors to be unmoved by it.
- klyrs 4y ago
  I think 6510 was proposing that the broker would present the smorgasbord of offers to the client, and after the client selects an offer, the lender would get the client's contact information. The lender would own their relationship after the client consents to that solitary relationship.
  - Kalium 4y ago
    I understood what 6510 was proposing. My point is that the lenders consider this to be them not owning the relationship and it requires the broker to do all the CRM work. Neither sees the smorgasbord approach as good for them. Could it be done that way? Sure! This just comes with the caveat that finding lenders willing to do it might be harder and they would likely pay less per-lead. So a higher volume would be required to make financial ends meet for the broker, who also is now developing and deploying more sophisticated software in addition to the whole sales funnel and marketing operation. You may be thinking "Gee, this is great for everyone except the customer". Yes, it is. It sucks for the customer who gets spammed by a dozen lenders.
    - klyrs 4y ago
      Right. Lenders and brokers want to exploit the customer for maximum profits. They do not want to respect customers, because they might make a little less money and it might take a bit more effort. The customer does not like that behavior, but an unregulated market rewards the worst actors so the customer cannot find what they would really want and is forced to settle. The FCC is supposed to protect the customer and regulate the market in this situation.