New tool aims to ease online mortgage shopping

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."