Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Bloomberg News reports that Microsoft Corp. (NASDAQ: MSFT) has threatened to start a proxy war for Yahoo! (NASDAQ: YHOO) and to drop its offer price if it does not get a response from its board. CNNMoney reports that Microsoft CEO Steve Ballmer has set a three-week deadline for a response from Yahoo! Microsoft is making noises about cutting its $44.6 billion offer for Yahoo!, arguing that the U.S. economic slowdown has hurt Yahoo!’s business.

Microsoft offered Yahoo! $31 a share on January 31st — 62% above its price the day before — and Yahoo! rejected the offer on February 11. Meanwhile, Yahoo! and Microsoft have lost share in the U.S. search market while Google Inc. (NASDAQ: GOOG) has gained share. Specifically, Yahoo!’s share fell from 22.2% in January to 21.6% in February while Microsoft ’s dropped from 9.8% to 9.6%. Google’s rose to 59.2% from 58.5% in January.

Yahoo! appears to be deluding itself that a stand-alone strategy will boost its stock price. On March 18, Yahoo! argued that its second place position in Web search, its operations in Asia, and the potential cost savings of the deal show it’s worth more than Microsoft’s offer. Yahoo said then that sales will climb at least 19% in each of the next two years and that growth would be higher than analysts anticipated.

Continue reading Microsoft grows impatient, threatens to drop its offer price for Yahoo!

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Hi Gang,

On Saturday I’m headed to Mexico via a nice cruise from San Diego down to Mazatlan, Cabo, et al.  I’ll be gone about 10 days.  I’m trying to load up some posts in the meantime, but I would love some guest posts while I’m gone.  

I’ll open it up to any Blown Mortgage reader.  Hit me up with an email with your post and I’ll queue it up while I’m gone.  Put your name, business and a link at the bottom so you get some props for your work.  

Last year when I went on vacation I had the good fortune of having some amazing guest posts and I’m hoping that luck finds me again for this brief respite.

All submissions considered, but I of course retain final editorial control.  Thanks for caring and reading.  You guys rock.

Source [blownmortgage]

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Filed under: Google (GOOG), Employees

I guess things are tough all over — even Google Inc. (NASDAQ: GOOG) is laying off people.

For the first time, the tech darling of the internet will be cutting a large number of jobs, with the reductions coming from the company’s new DoubleClick workforce. Google completed its purchase DoubleClick on March 11, and it was widely expected that the Goog would fire some of DoubleClick’s 1,500 employees. According to The New York Times, though, the 300 number is larger than expected.

Google is also planning on selling Performics Search Marketing, a unit of DoubleClick. Performics is a search engine marketing company that gets paid to place ads on search engines. This could interfere, or appear to interfere, with Google’s objectivity when ranking — and charging for — page popularity. So bye bye Performics!

Google has about 17,000 employees worldwide, having added over 6,000 in 2007. CEO Eric Schmidt has promised to slow the pace of hiring in the coming months.

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Filed under: International markets, Management, Harley-Davidson (HOG), Chasing Value, Stocks to Buy

When last I looked at Harley-Davidson (NYSE: HOG) in 2007 the stock was trading a lot higher. I argued at the time that there was value in this quality company and investors should take a look. Others liked the company, but wisely said there was plenty of time to wait because profits would be coming down with the slowing economy.

Some commented that HOG was over-priced in the high $40’s even though it had come down from it’s 52-week high of $66 per share. It was trading at a sizable 26% discount when I posted Chasing Value: Harley-Davidson (HOG) profits down 15% — beats Wall St. last November at $48.95. Having closed yesterday at $39.39 it is now down over 40%.

Many of the brightest minds in my circles feel the economy will not pick up significantly for another 18 months and that we will have fits and starts in between then and now. There does not appear to be any urgency to acquiring stocks that will be dependent on economic recovery to turn for the better. However, HOG might be one to dollar cost average into over time if you believe it will not turn into General Motors or fade like Levi Strauss.

It is currently paying over a 3% dividend yield and unlike other companies Harley has been raising it recently, not lowering it. The P/E ratio of 10 which is projected to hold going forward, the ROE over 36 which is substantial and the ROIC over 20 are more than respectable.

I have not heard even a whisper doubting its superior quality of management and they seem to have put any labor issues to rest as well. I thought there was value in HOG a few months ago so I have to believe the story is even better today with international markets growing and all types of motorcycles being considered for those trying to stretch their gas dollars.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of HOG.

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Filed under: Earnings reports, Good news, Industry, Canada, Options, Technical Analysis, Potash Corp. of Saskatchewan (POT)

Potash Corp. of Saskatchewan, Inc. (NYSE: POT) shares are soaring today after competitor Mosaic Co. (NYSE: MOS) reported a third-quarter adjusted profit of 99 cents per share, beating analysts’ expectations of 95 cents per share. MOS benefited from a global boom in the agricultural sector, which should certainly also be good news for POT. If you think that the stock won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on POT.

After hitting a one-year low of $54.93 last March, the stock has hit a new one-year high today. POT opened this morning at $173.01. So far today the stock has hit a low of $171.11 and a high of $175.46. As of 12:20, POT is trading at $173.90, up $6.23 (3.7%). The chart for POT bullish but deteriorating.

For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $130 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just six weeks as long as POT is above $130 at May expiration. POT would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.

POT hasn’t been below $130 since January and has shown support around $154 recently. This trade could be risky if the company’s earnings (due out on 4/24) disappoint, but even if that happens, that position could be protected by support the stock might find around $150 from it’s 50-day moving average.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in POT or MOS.

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We are once again firmly in Wonderland and falling deeper into the rabbit hole as the market is responding to negative news as if it just won a Powerball contest. On Monday, UBS AG announced another $19 billion in writedowns putting it firmly in the lead of all those in the writedown 500. […]
Related Posts:
■The Genesis of the Credit Bubble: Advertising, Deception, and $163 Billion in Subprime California Loans Resetting in 1 Year.
■This Housing Mess is Getting Ugly and Your Face Shows it. Unintended Consequences of Lost Home Equity.
■Real Homes of Genius: Today we Salute you Pico Rivera. $300,000 for an 856 Square Foot Home with 5 Bedrooms?
■Real Homes of Genius: Today we Salute you Buena Park. $511,000 for 864 Square Feet. Even Knott’s Berry Farm is Cheaper!
■Real Homes of Genius: Today we Salute you Stanton.

We are once again firmly in Wonderland and falling deeper into the rabbit hole as the market is responding to negative news as if it just won a Powerball contest. On Monday, UBS AG announced another $19 billion in writedowns putting it firmly in the lead of all those in the writedown 500. The race of course is dominated by investment banks and each writedown simply is a reflection of poorer performing mortgage assets;, aka Real Homes of Genius with sub-prime loans. Yet this is fantastic news somehow and the amazing plan that will turn the market around? Dilution of shares! You really have to enjoy the headline for this article:

And what does this plan further entail?

“To rebuild its cushion against further losses, UBS is seeking shareholder approval to raise $15 billion by selling new shares to existing shareholders in a so-called rights issue. “Our firm turned a page today at the end of a bitter chapter,” said Marcel Rohner, chief executive of UBS. “We will return our company to profitability.”

The write-downs at UBS and Deutsche Bank put financial firms’ total losses on subprime-mortgage investments well above $150 billion — more than halfway to the eventual total of $285 billion forecast by ratings firm Standard & Poor’s. That is based on a total of $1.4 trillion of subprime securities issued from 2005 through the third quarter of last year.”

It seems like a pattern is emerging here. First, if you are a large investment bank facing sub-prime problems you must:

A. Oust your leader with of course a nice severance package

B. Decide to sell more shares and call it “turning around” or some other cheerleading tagline

C. Announce the news in conjunction with horrible news (i.e., $19 billion in writedowns)

D. Add a touch of oregano and the market rallies

E. Rinse and repeat

If all goes bad, you always know that the Federal Reserve will step in and provide a back stop to a total collapse. There isn’t much to lose for those on Wall Street. Yet we now realize fully that the Fed cutting rates is doing nothing except kicking the dollar in the gonads and doing nothing to save the American homeowner. This has been the implication of course, that the rate cuts would somehow inject stability into the market which of course it has not. Now that we realize this hasn’t done much aside from diluting our US Dollar and we are still heading toward a recession, we get the amazing and fantastic $300 billion bailout via the FHA. Let us look at this puppy with closer eyes:

“Program would permit FHA to provide [up to $300 billion] in new guarantees that would help to refinance at-risk borrowers into viable mortgages. In exchange for the acceptance of a substantial write-down of principal, the existing lender or mortgage holder would receive a short payment from the proceeds of a new FHA loan if the restructured loan would result in terms that the borrower can reasonably be expected to pay. The existing lender or mortgage holder will have a cash payment and no further credit exposure to the borrower. This could potentially refinance between 1 and 2 million loans (and help these families stay in their homes), protect neighborhoods and help stabilize the housing market.”

Language is absolutely critical here. Whether you agree with this plan or not, this is a government sponsored bailout. I realize that this problem does require some solutions but if we are to seriously talk about these issues, let us call them for what they are. Heck, even Chairman of the House Financial Services Committee Barney Frank has this on the proposals:

“FRANK ANNOUNCES NEW ECONOMIC, MORTGAGE AND HOUSING RESCUE PROPOSAL”

So let us go back to the first paragraph. First, the wording on “viable mortgages” is very ambiguous. Does this mean 30 year fixed mortgages? Does this mean new mortgage products? Also, we read that lenders will need to accept “substantial” write-downs of principal to unload mortgages but what is substantial? Does that mean that the government will use independent appraisers to go to properties to accurately assess a value? If they are planning on allowing current appraisers to do the work this leaves the door wide open for more fraud and gaming of the system. Look what they’ve done with the current housing market! This here is extremely important since homes should be valued for their current market value and discounted at current rates.

It is clear even from the first paragraph that this will bailout mortgage holders. What if the property is worthless? There are some areas that simply have no market so how are these going to be valued? There does appear to be some back stops for these contingencies:

“Eligibility Requirements for Existing Loans (Requires All of the Following):

• Owner-occupied principal residences only (no investors, speculators or second homes);
• [Existing senior loan being refinanced must have been originated between January 1, 2005 and July 1, 2007];
• To remove any incentive for borrowers to “purposely default,” the borrower must have had a mortgage debt-to-income ratio of no less that 40 percent as of March 1, 2008, and must certify that he/she has not intentionally defaulted on existing mortgage(s). Regulators can make exceptions for involuntary changes after that date;
• Participating mortgage holders/investors must waive any penalties or fees on the existing mortgage and must accept proceeds of the new loan as payment in full;
• Existing mortgage holders/investors must accept their losses - taking substantial write-down sufficient to establish a 5 percent loan loss reserve for the FHA, bring the loan-to-value ratio on the new FHA-loan down to no greater than 90 percent of property’s current appraised value, result in a meaningful reduction in mortgage debt service by the borrower, and to pay all up-front fees for the new loan. Accordingly, to qualify, mortgage holders would need to accept a substantial write-down, receiving no more than 85 percent of the property’s current appraised value as payment in full for the existing loans.”

I actually tend to agree with most points however, the main concern I hold is that if we are to use the current infrastructure of oversight, there is huge potential for fraud once again. Unless we have new entities coming in and ensuring appraisals are correct and accurate and verifying owner occupancy and also income, we will once again be going into liar loan territory. There is a lot to gain and lose here and the pressure to commit fraud by institutions is high. Those hungry for commissions will do anything they can to squeeze people into homes once again. If this plan does go through as is, it is incredibly important that stiff penalties and oversight are put over the lenders like a hawk.

Some of the language here is too flexible. What do they mean by purposely default? Do they mean walking away? They have to be more specific here. Also, I’m certain that many investors will fight to keep the penalty fees in since that is a reason many brokers made out like bandits on these mortgages. The more toxic the higher the yield. Now who will be one of the few responsible for this oversight?

“Increased Fraud Prevention/Oversight

• The HUD Secretary shall establish independent quality reviews to determine underwriter compliance, and rates of delinquency, claims and losses;
• Submit semi-annual reports to Congress; and
• HUD Inspector General shall conduct annual audit of the program.”

Bwahaha! You mean Alphonso Jackson who just resigned a few days ago under massive cronyism charges? Interesting how right on the back of this new FHA proposal the HUD Secretary resigns. Oh man we are so screwed.

Real Homes of Genius - Today We Salute you Covina

Let us not forget that there is a ton of junk floating out there. We are nowhere close to seeing the end of sub-prime resets and we haven’t even taken a look at Alt-A or Pay Option ARMs. These are the next ticking time bomb that should hit in 2009 through 2011. The above home just hit the market a few days ago. It is a 3 bedroom 2 bath home in the city of Covina. The home is currently bank owned so fortunately, this would not qualify for the new FHA plan. But let us take a look at the sales history here:

Sale History

01/17/2008: $411,507 *

11/17/2003: $268,000

06/25/2002: $210,000

We can presume that the sale price in January was simply the bank taking the place back. You may be wondering, how can it be that a place that sold for $268,000 in 2003 now has a balance of $411,507 without any sales? Welcome to the next big issue, the home equity line and second mortgage problems. Given that recent data shows that $1.1 trillion in home equity mortgages is out there, and these certainly won’t qualify for the FHA bailout, we have another issue just waiting to fall. This place has a pool listed and one of the pictures shows that it has modern accents to it. Given that the home was built in 1954 I think you can put 2 and 2 together and have an idea where the 2^nd mortgage went. The current price is $370,000 and I’m sure given the 424 other homes for sale in Covina, this place will have stiff competition.

There is a great new tool out by the New York Fed that uses data from Loan Performance to show mortgage market data across the U.S. This is a very useful tool and may run a bit slow given that I’m sure many are using it:

I went ahead and ran the program on Covina and the results do not look promising:

Share in foreclosure: 10.8%

Share ARMs resetting in 12 mos: 43.2%

Share low or no documentation: 47.5%

Share ARMs: 73.8%

And how we are close to a bottom with the above statistics is beyond me. Today we salute you Covina with our Real Homes of Genius Award.

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Related Posts:
■The Genesis of the Credit Bubble: Advertising, Deception, and $163 Billion in Subprime California Loans Resetting in 1 Year.
■This Housing Mess is Getting Ugly and Your Face Shows it. Unintended Consequences of Lost Home Equity.
■Real Homes of Genius: Today we Salute you Pico Rivera. $300,000 for an 856 Square Foot Home with 5 Bedrooms?
■Real Homes of Genius: Today we Salute you Buena Park. $511,000 for 864 Square Feet. Even Knott’s Berry Farm is Cheaper!
■Real Homes of Genius: Today we Salute you Stanton.

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Filed under: Analyst reports, Analyst initiations, Options, Technical Analysis, Juniper Networks (JNPR)

Juniper Networks, Inc. (NASADQ: JNPR) stock is relatively flat today after an analyst at Friedman, Billings, and Ramsey initiated coverage on the stock with a “Market Perform” rating, saying he expects modest growth for the company over the next few years. The analyst said profit forecasts by other analysts are realistic, but there is reason to be cautious on JNPR, since other vendors have noted increasing caution by customers. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on JNPR.

After hitting a one-year low of $19.86 last April, the stock hit a one-year high of $37.95 in October. This morning, JNPR opened at $24.30. So far today the stock has hit a low of $23.69 and a high of $24.39. As of 12:40, JNPR is trading at $24.39, up 1 cent (0.04%). The chart for JNPR looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $31 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make an 8.1% return in 3 and a half months as long as JNPR is below $31 at July expiration. Juniper would have to rise by more than 27% before we would start to lose money. Learn more about this type of trade here.

JNPR hasn’t been above $31 since January and has shown resistance around $26 recently. This trade could be risky if the company’s earnings (due out on 4/24) are a positive surprise, but even if that happens, this position could be protected by resistance JNPR might find at its 200 day moving average, which is currently around $31.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in JNPR.

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Filed under: Deals, Launches, Industry, Consumer experience, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), AT and T (T)

AT&T (NYSE: T) is giving out strong hints that it may use the new Google (NASDAQ: GOOG) Android mobile operating systems in handsets it will release later this year. Yahoo! (NASDAQ: YHOO) is the “official ” search engine on AT&T phones now. That could be something of a problem for the beleaguered portal company.

According to The Wall Street Journal, the chief of AT&T’s wireless operation “noted that AT&T will be able to customize the Android software’s open-source coding to promote the carrier’s own data and content services.” That might be in place of what the telecom company is doing with Yahoo!.

It is hard to say whether Android is picking up business because the software is so good or because Google has such great clout. Either way, it may be pushing other operating systems from Microsoft (NASDAQ: MSFT) and Symbian out of a piece of the market. Since Android is an open-source system, it allows programmers to add features in a way that other mobile softwares do not.

Google likes to give its competition fits. It looks like it is succeeding again.

Douglas A. McIntyre is an editor at 247wallst.com.

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Zillow launched its mortgage product tonight and from my review of the platform seem to have taken a major step in the right direction when it comes to leveraging the internet to provide consumers with quality mortgage options without the treachery that is online lead generation. I had a sneak peak at the platform and I’m duly impressed at the way Zillow has put consumers in control of the transaction right from the start.

You’ll see the new Mortgage Marketplace as a new tab in Zillow’s home page navigation and there are two paths once you get to the marketplace, either as a lender or as a borrower. If you remember about a month ago Zillow started taking lender applications to prime the system to be ready for this day. I made a big deal out of the vetting that went in to the application process and I’ll go in to detail now about why that was such a big deal. The lender side isn’t that sexy, so let’s talk about what the Zillow Mortgage Marketplace means for the consumer.

Accurate information without the hounding

The paradigm-shifting change at Zillow is the separation of the consumer’s contact information from the loan information.  This gives the consumer total anonymity when soliciting mortgage quotes which is something that must sound like music to consumers’ ears.  With this one move Zillow has eliminated a MAJOR pain point for borrowers shopping online for a mortgage.  

The number one complaint we received from internet-based leads was that they had been hounded to death on the phone for business.  I knew of a lady who lost her job because her office line rang incessantly after she filled out a lead on lowermybills.com.  People turn off their phones, unplug their home phones and generally do whatever they can to avoid be hounded to death once their information gets out on the internet.  

Zillow allows them to 100% control the interaction by getting custom mortgage quotes by providing their scenario in a standard pre-qual format (their interface is pretty similar to a typical online prequalification form you’d see elsewhere - Zillowfied of course) minus their personal information.  Zillow has made it a bit more user-friendly by helping people estimate their credit scores through a series of questions and have also made the mortgage product choices easier by eliminating some of the more exotic programs from the quote options.

Once a consumer submits this anonymous quote lenders in the system can “bid” on the quote. They can quote rates, fees and terms that are submitted with a brief introductory paragraph from them as well as their picture and a link to their profile page.  The principal and interest payments are automatically calculated by Zillow based on the loan program, term and fees and the taxes and insurance are estimated based on property records (Zestimate?) so that there can’t be any manipulation of those numbers.  

Consumers are presented these quotes as they arrive and when they find one they like they can choose to contact the lender directly and share any additional information they choose to at that next step.  They are never bothered by unsolicited phone calls or emails.

The Originator Rating

In addition to the quotes that they receive that come packaged with an intro paragraph, easy-to-understand terms and pre-calculated payments the originators submitting the quote carry ratings with them of 0 to 5.  These ratings are calculated based on consumer feedback after dealing with the originator.  The ratings have nothing to do with fees or loan terms and everything to do with the process of working with that lender.  So if there were changes in the loan, or things seemed shady or uncertain consumers can rate that originator poorly, and vice-versa.

Loan originators who feel wrongly scored can rebut the poor score and all of it is kept with their profile to provide consumers the clear picture of who they are dealing with.  They can now determine whether they want to work with the person with the lowest rates and fees and a low rating, or pick someone with a higher rating that has higher fees.

I think this is a great step towards providing transparency for consumers and an easy-to-understand scoring system that allows them to make choices in a difficult decision-making environment.  Of course, Zillow will have to police the marketplace and eliminate offenders on both sides of the wall, ensuring that slanderous consumers don’t blackball innocent lenders and vice-versa; but the step is a positive one and one that should help consumers in their quest for an honest, straight-forward (non-blown) mortgage.

Originators get transparency too

In addition to the consumer getting multiple, anonymous offers the originators who are submitting the offer can see all of the other offers that the consumer has received and who has submitted those offers.  This is a great tool for originators to use as market intelligence - they now know who and what they are selling against.  They can talk intelligently about the universe of offers that the consumer has without having to sell without any information about what or who they are competing with.  I think this will be a big help in letting originators determine what customers they quote, how they quote and their overall strategy towards leveraging this platform.

The Code of Conduct

In addition to the upfront vetting that Zillow performs on originator-applicants Zillow has rolled out a Mortgage Marketplace “Code of Conduct” for all parties involved.  The code calls on consumers to be law-abiding, honest in their disclosure of income, credit and other material qualification criteria, and fair and reasonable in their rating of originators.  Originators are called on to be law-abiding, upfront, to stick to their original quotes as long as material facts don’t change from beginning to end, and to respect consumer’s in the marketplace regardless of what the consumer ultimately decides to do.

Zillow will of course play ombudsman in its sandbox and will bounce originators and consumers who use the marketplace in ways that Zillow deems unacceptable to a healthy environment.  This is at their sole discretion. 

Here are the highlights from the Zillow Code of Conduct, you can read the whole thing here:

Principles for Lenders

• Stand behind your quotes
  Don’t provide lowball loan quotes and teaser rates to intentionally draw in a borrower and then “readjust” your quote. We alert borrowers that the anonymous nature of Loan Quotes prevents an initial quote from being a binding Good Faith Estimate; however, we expect you to stand by your quote if the information provided by the borrower is accurate.
• Disclose all terms of the deal
  Be upfront and transparent with various rates and fees so that borrowers will regard you as a trusted lender. Do not hide details of the loan in fine print; our loan quote form is designed to easily identify these costs. Be ready to answer questions and walk borrowers through each step of the process. Helpful lenders will get good ratings on Zillow, leading to more business down the road.
• Obey the law
  Discrimination in mortgage lending is prohibited by the U.S. Department of Housing and Urban Development’s (HUD) Fair Housing Act and the Office of Fair Housing and Equal Opportunity actively enforces those provisions of the law. The Fair Housing Act makes it unlawful to engage in the following practices based on race, color, national origin, religion, sex, familial status or handicap (disability): 
  • Refuse to make a mortgage loan
  • Refuse to provide information regarding loans
  • Impose different terms or conditions on a loan, such as different interest rates, points, or fees
  • Discriminate in appraising property
  • Refuse to purchase a loan or set different terms or conditions for purchasing a loan
• No spamming
  If you have made contact with a borrower and things didn’t work out, please be professional and end your contact with that person. Do not add their contact information to your promotional lists or provide their contact information to others unless you specifically ask for the borrower’s permission first.

Principles for Borrowers

• Accuracy, accuracy, accuracy
  Be accurate when filling out mortgage loan requests, particularly when you estimate your credit score. Lenders will prepare quotes based on the information you provide. If you submit information that is not accurate, you will get loan quotes based on inaccurate information and the quote will likely need to be readjusted.
• Rate/review mindfully
  You may rate any lender you’ve contacted through Zillow Mortgage Marketplace. However, your rating for a lender with whom you’ve closed a loan carries more weight because you experienced the full extent of the lender’s service. So, please rate thoughtfully so that others can benefit from your feedback. 
  • If you contacted a lender, but did not close — Your rating should be based on how responsive a lender was in providing a quote and follow-through during the process; it should not be based on the quote received.
  • If you contacted a lender and closed a loan with them - Your rating should be based on how responsive a lender was in providing a quote, finding the right loan for you, the rate and terms for the quote and follow-through during the closing process.
• Report questionable or unscrupulous behavior
  While Lender Ratings is one of the most valuable tools you can use to rate the quality of a lender, we also want to know if you encounter any questionable practices by any lender. Contact Zillow Customer Support by e-mail at mortgagesupport AT zillow.com so that we can quickly respond if necessary. Also, if you feel you have been subject to discrimination, file a complaint with the U.S. Department of Housing and Urban Development (HUD).
• Be informed and responsible
  There are scores of tools at your fingertips to help you evaluate the loan offers you receive from various lenders. We have assembled many of these in our Help Center. Take advantage of these and weigh your options and long-term implications before signing up for particular loan. 

Will originators use it?

The first question that came to my mind is would a high-quality originator use this?  I can’t imagine a Brian Brady spending his days blindly filling out GFE’s to ghosts who may or may not work with him.  It is feasible that a consumer gets upwards of 20-30 offers on a quote or more (it’s not restricted).  What is going to make Brian Brady use his time for a small chance win when he has a million other strategies that will result in higher close rates?  Knowing Brian he will find a way to succeed with this platform, leverage administrative resources of find a way to leverage this marketplace; but what about those who are good but don’t want to fire shots in the dark?

I think that’s the big question to be answered as this marketplace evolves.  Are the consumers getting lower-quality originators because the good ones don’t want to play consumer roulette with GFEs?  It will be interesting to see how it plays out as the marketplace evolves. 

A big step in the right direction

The online “lead” model has been broken since its inception and has caused irreparable harm to not only countless consumers but to the image of the industry as a whole.  People who bought and sold private data across convoluted networks of lead brokers abused people’s trust that the lead form they completed would be a great offer from 1 of 4 lenders.  This clearly has not worked.  Zillow puts the power in the consumer’s hands.  Now they can shop from hundreds of offers at their discretion from behind the Zillow wall of privacy which is certainly a step in the right direction; now the question is - will the best in our industry use it?

What do you think?

Source [blownmortgage]

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