The online broker said the new will infuse transparency into what has traditionally been a confusing process for borrowers. The new tool includes a public lender feedback system, where borrowers can rate the lenders they contact.
Zillow, which had focused only on providing online information about U.S. housing prices, launched the online marketplace to meet consumer demands that their personal contact information remain private, and for realistic, not "teaser" interest rates,said Zillow CEO and co-founder Rich Barton in a .
"They would also like to shop across their options and be able to do an apples-to-apples comparison of loan quotes from multiple lenders in a standard format," he noted. "They'd like to be able to understand the reputation of the broker or lender as seen from the perspective of other borrowers, much like they can judge a seller's reputation on or a hotel's reputation on TripAdvisor".
The company also looked to help vendors spend less time and money pursuing customers, Barton added. "They've told us they don't like calling people at dinnertime any more than borrowers like to be called," he said. "They love the idea of free access to an anonymous marketplace of quote requests from borrowers who fit their desired criteria for providing a loan."
To access the mortgage marketplace, users click on the "mortgages" tab on Zillow.com. Potential borrowers can request customized loan quotes by filling out a detailed loan request form. Borrowers do not provide any personally identifiable information to the lender -- no name, address, phone number or Social Security number is required.
After a borrower submits a request, any lender visiting Zillow can browse those requests and view competing quotes from by other lenders. Only lenders who have registered on Zillow and are confirmed as mortgage professionals can submit quotes, Zillow said.
Zillow requires that lenders disclose all fees upfront. Zillow estimates taxes and insurance and provides an inclusive estimated monthly payment for borrowers. This makes it easier to compare loan quotes on an apples-to-apples basis, note differences and better evaluate overall affordability, according to Zillow. The borrower chooses which lenders to contact, maintaining complete control of the process. Only when a borrower contacts a lender will their identity be revealed.
Zillow said that it does not take part in the transaction process, and it vowed that it won't sell contact information of its users. According a survey conducted on behalf of Zillow, more borrowers (58 %) are concerned about having their personal information sold or shared than about missing an opportunity to get the best available rate (55%).
Mark Hendrickson, a blogger at the main advantage of the marketplace lies in protecting borrowers' identities and "tipping the balance of power in their favor." The ability for borrowers to rate the lenders is also a key advantage of the system, he added.
"The extra transparency also lets lenders know what types of offers they are competing with, which could lead to more competitive deals," he noted. "That's okay with lenders, though, since they're gaining access to a larger market for which to make their offers."