Google Launches Mortgage Shopping Tool in California | Hacker News Reader

Google Launches Mortgage Shopping Tool in California

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144 pointsuptown81 comments

Surprising they're working with Lending Tree, which is very nearly a scam site. When you sign up with LT, your information is sold immediately, your credit is pulled multiple times (making it harder to get a mortgage), and you get an endless torrent of spammy calls. See CreditKarma reviews of LT: https://www.creditkarma.com/reviews/auto-loan/single/id/Lend...

Edit: A question about the mathematics of mortgage brokers. From what I've read, mortgage leads are sold for ~$30 and have a conversion rate of ~1-3%. This means that the purchaser of the lead has to recover ~$1500 per closed loan to pay for buying the leads. Doesn't this mean that loans from a broker site like this will cost you a lot more than working with lenders directly? My mortgage (from a direct lender) was a much better deal than I ever found on Bankrate.

Scam site? That's pretty strong language considering that the site actually does what it says on the tin (source: 3x user of the site) - comparison shops mortgages then connects you with the lenders.

What it does not say on the tin is that the companies will sell your address many times over, resulting in a torrent of spam. I have my own domain, so I can see exactly where those spam originated. Then I used the site a few years later, with a new email, and that one got a torrent of spam.

In theory you should get a better deal working directly with lenders.

In practice? For me it was the opposite. I worked with a mortgage broker (a professional, not a website) and I got a much better deal.

For startup folks, this is even more common. My current mortgage holder originally denied me credit completely (they were scared of someone working at a startup). My broker knew exactly how to work around this issue, asked me to sign a few forms, made a few calls, and then the same bank came back with the best offer.

Your best bet is to get a few quotes directly, but then to work with a mortgage broker to see if they can beat your best offer -- quite often they can.

I'll bite: how did they work around the issue?

I don't know all of the details, but my broker knew the right person to call at the bank. They asked for some details on the company, which I provided, and then viola, it was approved with a great rate.

This is the kind of thing that's impossible to do getting quotes from a website, or talking to someone that works at your local branch. It's a matter of knowing how to package your application and then being able to speak with someone that actually has some ability to make the decision.

That always made me a little nervous. We have all these new safeguards in place around mortgages since the last crisis, and I wonder how things like this are ok to leave up to back-channel conversations.

Not knocking you or your situation specifically, but in general if someone is not a great risk, but that goes away if they get someone to make the right phone calls, is that a good thing in the big picture?

Not judging, just posing the question.

It sounds like the risk wasn't quantified correctly in the first place. Being a highly-skilled tech worker, working for a well-funded startup should have nearly no impact on the probability of you being able to pay your mortgage. Even if the thing collapses, you can have another job within a week. If the whole industry collapses in a dotcom bust style, established companies will be heavily impacted as well.

I had a similar situation when buying my house. Tech employee, fairly high percentage of compensation was stock options (we'd gone public ~18 months prior) and the standard route wasn't working (as there was no place to put the variable/incentive comp).

Mortgage broker got it done very easily (albeit with Countrywide, not exactly known for the strictest of standards :) ).

Never missed or late on a payment on that loan.

Different companies offer different products. Some lenders were doing 90% LTV up to 800k, some were doing it up to $1m. Some lenders might give 30 year fixed rate loans on certain high LTV loans, others might only do ARMs.

Every business makes a calculation about what kind of business it wants to do.

I did not use a mortgage broker when buying a house. My reasoning was that they compete on price enough that the interest rates aren't worth shopping around for. The PRODUCTS may be. If I was doing a bridge loan to buy a 2nd house, I might shop around. If I'm doing a straight-up financed purchase on 2 stable well-documented incomes, I'm probably going to get about the same product and rate no matter what bank I use.

fyi, fico8 and fico4 (which is what mortgage vendors use) coalesce multiple mortgage or auto inquiries in a 45 or 14 day window, respectively, into a single inquiry for scoring purposes

https://www.incharge.org/military-money/story/the-truth-abou...

The other thing you should do before any mortgage inquiry is opt out of pre-approved credit offers. Why? Scummy collection agencies and junk debt buyers know that you cannot be approved for a mortgage with any open, unpaid collection accounts. So if you have a medical bill that you forgot to pay, you'll be forced to pay it in a hurry. And hell, even if you have other bills that may or may not be yours, or are out of SOL, or any other thing, you will have to pay them if you actually want that mortgage. Yes, this is a giant violation of the FDCPA, but you are not going to get anything fixed within 30 days under the FDCPA.

Opting out means you can't be shopped around by the credit reporting associations (equifax, experian, transunion) on their list of mortgage shoppers. You can opt out for 5 years here:

https://www.optoutprescreen.com/?rf=t

If you want a mortgage in, say, 6 months you should go get a single inquiry tagged as mortgage to see if anything comes out of the woodwork. http://quickenloans.com can do that for you.

Not sure about the US, but in Australia the broker's cut comes from the bank side and is not something you'd recover otherwise. They do however get a long trail of commissions from the loan.

Used a broker recently to refinance and it saved me over 1% on the rate and she did all the legwork in picking up documents, scanning, etc. Friend refinanced themselves and they were forever printing documents, driving across to banks to ID in person, etc.

> your credit is pulled multiple times (making it harder to get a mortgage)

That's a myth. All mortgage credit queries within a 14 day window count as a single query. Lenders have not biased the system to penalise you for shopping for a good deal - they want to make offers to people who show good financial sense by doing that.

Also, when I signed up for Lending Tree I did not provide permission for hard inquiries. Every interested lender had to contact me and get my permission for a credit pull.

14 day is a very short window. I was mortgage shopping for over 2 months recently.

> To power this tool, Google partnered with Zillow and LendingTree.

I hope Google isn't just pulling in LendingTree data and using their backend. I just moved 4 months ago, and thought I'd give LendingTree a try. I singed up, and the only real "offer" I received was from Quicken Loans, which I suspect was actually just a blanket offer/advertisement in the system. I also got a lot of bad credit-fixing "advice" that actually wouldn't help me at all - Get another (better) credit card! Take out a personal loan! Reconsolidate student loans! (when all mine were already consolidated at a low rate with EdFinancial). Overall, a bad experience that were clearly just ads/referrals that made me never want to use LendingTree again. Who knows what they have done with my personal and financial data.

In the end, I went with a local bank, and secured a mortgage with no hassles at a much lower rate than the only LendingTree "offer" (ad) for Quicken Loans gave me.

If you're shopping for a mortgage, just call a few local banks and credit unions. You will most likely get a much better deal there.

Mmm, the HN affluent community with 820 credit scores and dual-six figure incomes probably won't see much value from this as it stands. But, I see it as jumping point - one more layer of transparency that Google can potentially offer us. Previously, shopping around for car insurance was a pain. Now, I don't have to deal with some guy who's making commission (which isn't bad) on some products but not others (which is bad). I can go to Geico, Progressive and a few other sites-- immediately get quotes-- compare them, and in under 30 minutes I'll have a car insured. Every step of the process was transparent, and I didn't have to deal with a salesman.

My parents walked my sister and brother-in-law through the process of getting a mortgage underwritten for their condo as a wedding gift. It involved so much BS such as documentation of employment despite the fact that my father has been receiving faculty checks from the same institution in Cambridge direct-deposited to same bank for more than two decades. Hopefully Google will "Geico" this up and by the time I decide to purchase a condo or home, I don't have to deal with the same tedium that they did.

That being said, I hold my personal money at a credit union (Alliant, it's the New INGDirect![1]) because hey, I'd rather support them than Bank of America. The business house bank is with a local bank, again, because my co-partners and I would much rather keep a balance with a small-ish business rather than a conglomerate who exploits poor people and college kids with ridiculous compound overdraft fees.

[1] https://www.alliantcreditunion.com/ Post CapitalOne360, INGDirect has been on a steady decline. I'm now a happy customer. If you happen to be :cough: a former employee of any of the companies within the co-op, you can make an account. Support them or your local CU.

Thank you for the Alliant recommendation. I story my money at CapitalOne360, and although I still like it, I worry what will happen to it after the acquisition. I think I'll switch to Alliant.

This feels like Elon Musk opening a Denny's restaurant. You do other stuff, why get into this business, especially if they're just rebranding the Zillow mortgage feed.

There's a lot of money to be had (a well qualified mortgage lead is worth ~$90 a pop), but it seems inappropriate for google.

I'd have to think as a licensed mortgage broker, their take would be much greater than $90.

$90 for the lead, not what it is worth overall. They're not closing 100% and the leads may be shared down the pingtree or as they age.

And if Fannie and Freddie no longer provide federally-subsidized loans, mortgage products would make a fine fixed income product for Google's cash reserves to help fund Alphabet and Calico.

The AdWords money train ain't gonna run forever. Time to diversify now!

And if they start funding a huge basket of subprime stuff they will have all the funding they need to really soar their Alphabet internet balloons into the stratosphere.

If anyone has enough information on borrowers to properly price the risk, it's Google. Far more information than any traditional lender or mortgage broker is going to have.

I'm not sure they could legally use all of it to do underwriting, that's a tricky area. Also, for better or for worse, the GSEs + Ginnie are not going away any time soon.

Agreed - they're moving up the value chain (why sell ads when you can just take the commission yourself).

That said, it does feel inappropriate and I wonder at what point Google's results will become the thing that they tried to differentiate from in the first place (previous search engines had ads placed throughout the results without scrutiny).

Funny how they're moving from "these are the best results" to "these are the results that make us the most money."

Denny's actually makes a profit. Elon Musk doesn't.

Denny's doesn't make rockets or electric cars, just 24 hours of shitty breakfast food.

Denny's doesn't need government bailouts to stay open.

https://duckduckgo.com/?q=elon%20musk%20survive%20on%20gover...

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he's built those companies with the help of billions in government subsidies.

http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015...

Uncle Sam would have been better off investing in Denny's.

My stomach needs to be bailed out after eating at Denny's

Uncle Sam would have been better off investing in Denny's.

I think that's an absurd statement. The upside for Denny's is not nearly as much as it is for the businesses that Musk is in.

I can't tell if you're trying to say that only proven ideas deserve investment or something else. Care to clarify what your point is here?

I think you're being a tad disingenuous.

If Elon's ideas are so great, why does he need government subsidies?

Wouldn't private investment be rushing to capture the returns from these so called "huge upsides"?

If regular gas cars are so great, why do they need government subsidies?

Hell, if gas is so great, why does it need government subsidies?

Do your research. Subsidies for traditional cars and for oil are massive and dwarf anything Tesla has ever gotten.

Teslas sell for over $100K a pop. It's a rich man's toy. http://www.nationalreview.com/article/397162/tesla-and-its-s... ... Every time a Tesla is sold, we witness a transfer of wealth to a rich hobbyist (most Teslas are their owners’ third or fourth car), while average Americans are on the hook for at least $30,000 in federal and state subsidies. Tesla is more a regulatory arbitrageur than an auto manufacturer. In its 2014 annual report, Tesla made clear that continued special tax benefits are critical to the company’s business plan: “Our growth depends in part on the availability and amounts of government subsidies and economic incentives.”

Technically I would not call it a transfer of wealth to the rich hobbyist. The subsidy doesn't go to the private buyer, it goes to Tesla. No one will buy the (now used) car for the full sticker price from the private buyer, but even if they did you are not allowed to claim the credit if the car was bought for resale. The buyer is not $30k richer after the transaction is complete. And when the subsidy no longer exists, the price will not simply be $30k higher, a significant portion of that lost income will be eaten by Tesla. (which is exactly what they are saying in their risk disclosure)

As a country we have a strategic interest in having viable battery powered electric cars. You can personally not believe in it, but it is a stated-goal from the President on down. What's the best way for the government to help make that happen? A subsidy is the classic macro-economic tool, business loans are another.

When we give Tesla $30k in government subsidies for each car they sell, we're simply telling Tesla we'll subsidize them more as they sell more. Rewarding market success is the right way to structure a subsidy if you want to encourage companies to make products that people actually want to buy.

I'm sure you also know Tesla is burning through cash at an impressive clip, I think they burn about $50k each year per car they sell, and that's net of the sales price! That's not to say that gross margins for the car are negative, it's just to say that their reinvestment rate for R&D is set to '11'. That's partly supported by the early adopters, part investors, and part subsidy. But it is clear they are iterating fast on new technology, and as a bonus they are even putting their patents out for general use, and undoubtedly driving a stagnant and change-resistant industry forward.

Finally, it's incorrect to claim that average Americans are on the hook for at least $30,000 in federal and state subsidies. That is looking at just one line on a very long invoice, and what we're actually interested in is the net effect. So we have a "rich hobbyist" paying $70k after-tax cash for a prototype electric vehicle. First, there's perhaps $10k - $15k in local excise taxes over the life of the car, which is a pretty nice bonus for the town. "Cars" as an asset class are taxed especially heavily, and as you say for many the Tesla is an extra car they wouldn't have bought otherwise, so that level of excise tax is not money the town would have seen otherwise. Second, there's increased employment and associated tax revenue from Tesla in general, including things like their battery factory. Maybe down at number 30, we have an extremely safe car that kills less people, which saves taxpayers money too. Somewhere on the list is a blue bird that 20 years down the line the tech has matured to the point where it is a major geopolitical factor in our dependence on foreign oil helping us disengage from the Middle East and potentially saving taxpayers a few Trillion. There are actually many ways you can start off handing out over $30k per vehicle but end up in the black!

To clarify, you don't think private investment is up to solving the better car problem? Government needs to pick the winners and losers in this situation?

When did the government do that? They offered the subsidy to any business who could build a viable electric car, not just to Tesla. It's not instead of private investment, in fact there's quite a bit of that with Tesla, but rather "more is better". It's a classic subsidizing of positive externalities, a basic role of government.

Are you pretending that there haven't been incredible subsidies around oil, gas, and the whole infrastructure which was built up to support the ICE? The government investment into electric vehicles is quite paltry by comparison. I hope I'm in the middle of an economic discussion, not a political one. To me it seems like the subsidy was well thought out to achieve stated strategic goals and appropriately sized -- enough to materially effect the decision making process of what to purchase, but not so much that you basically can't afford not to buy one (e.g. "cash for clunkers").

Oh come on. We've been over this "government subsides for Elon" bullshit half a year ago. You're late to the party.

TL;DR: Tesla is the kind of lendee you want to have more of - uses the money for real R&D, pays loans down quickly and in full, gives back lots of value to economy. It's basically the textbook case of what those loans were made available for in the first place. It's the one company that you shouldn't be complaining about.

Government is giving free money that could be used to bring ideas to market faster; why should Musk not take it?

Tesla bonds considered junk bonds ...

https://encrypted.google.com/search?hl=en&q=tesla%20bond%20r...

Junk bonds sound more negative than they are. It just means they aren't a nation-state or a decades-old multi-billion dollar company, so there is more risk of default.

But bondholders get priority over stockholders the same way preferred stockholders get priority over common stockholders. And as a result, it's less risky to buy bonds than to buy the company stock, since they could at least pawn off the factories and cars if the company has to be sold off.

A quick Google search shows a market cap of 28 billion, and outstanding bonds worth 1.2 billion. So it seems unlikely to me that the company would be unable to be sold off for 1.2 billion to cover the bonds.

To spur research and development of grand slam breakfasts?

I can't say I'd be opposed to this.

You're probably being a bit facetious here, but I'm not sure why you think investing in reusable rockets, highly efficient batteries, and renewable energy is less important than government investment in a 24 hour breakfast chain.

I started going of on a tangent about tipped employee minimum wage and food subsidies, but realized that was dumb.

Uncle Sam would be better off not buying rockets from Russia.

Although I see what you mean, it's worth noting that Elon tried to do exactly that.

http://www.bloomberg.com/graphics/2015-elon-musk-spacex/

their pancakes are better than I can figure out how to achieve. now if only they had real syrup...

It's all in the heat level and seasoning of the cooking surface. It definitely isn't the ingredients or technique, as those would tend to increase COGS :-)

http://www.spacex.com/about "Profitable and cash-flow positive, the company has nearly 50 launches on its manifest, representing close to $5 billion in contracts."

Google is likely doing this to quantify your buying power. Advertisers will pay Google premium CPC for targeting buyers with deep pockets. Google can do the math backwards and estimate things like buying power and income provided an applicant can afford a mortgage of X per month. google.com/compare/autoinsurance serves Google's ad targeting in the same fashion.

Google can already very accurately estimate your buying power using it's availble data.

do you have a source for this idea that they take your inputs and use it for further ad-targeting? i don't see this specifically mentioned in the privacy policy for this auto-insurance product: https://www.google.com/compare/autoinsurance/form?p=privacy-...

It's low hanging fruit ... too good to pass up for the potential revenue, and they already have an idea how many people have searched for this info using Google as their starting point.

This is the inevitable fate of all lead gen IMO - Google - between Adwords and analytics - has absolute visibility into the cost per lead metrics and, in many cases, backend close rates for every search category in the world.

Next up: Google Mesothelioma Attorneys

Right. Instead of stopping search spam, Google has figured out how to monetize it. Search for "credit card". Instead of spammy sites being at the top of the search results, you get Google's own spammy ads.

Ten years ago, there was a Web Spam Squashing Summit.[1] Google was a sponsor. The next year, Google was a sponsor of Search Engine Strategies, the web spammer convention. That was the moment Google turned to the dark side.

[1] http://www.sifry.com/alerts/2005/02/web-spam-squashing-summi...

I am not disagreeing with you but google flights is really good and google hotels is somewhat ok.

Does it matter how objectively good it is when Google gets to just put it on top of the search results? Personal opinion's aside, I'm convinced that Europe will answer, "No." Google will be the next Microsoft of our time, trying to split the company in order to get their own products listed in their own Search. Perhaps we've already seen the groundwork being laid for just such a split with Alphabet?

Google Cash for Gold

Eh - Google is going to cancel this project in a few months as it withers on the vine. Google is good at making little innovative products, but not good at maintaining them.

Lead generation would be higher up the advertising value chain than pay per click ad supplying. If this is even moderately successful I would think it would get close to the kind of attention AdWords or AdSense gets.

Article link is useless wrapper around http://adwords.blogspot.com/2015/11/introducing-google-compa...

Google had a mortgage-finding tool quite a few years back, but I think they killed it for legal reasons.

I remember it, because I found a good rate on a re-finance. The mortgage company was in Pennsylvania and I'm in Texas, so we did the whole thing remotely.

The UK mortgage comparison tool was launched in December 2012¹. Possibly the market for comparison tools is more developed in the UK — there are high-budget advertising campaigns from comparison websites encouraging people to switch energy provider, ISP, insurance etc.

The service isn't run by Google: "Google Compare, the trading name of BeatThatQuote.com Limited..." ²

² https://www.google.co.uk/compare/mortgage/qs

¹ http://www.which.co.uk/news/2012/12/google-launches-mortgage...

This is just an example of ad networks moving down the supply chain. Lead gen, customer retention systems, even support services are a possible evolution of core ad networks services. The reason for this is quite simple: ad blocking.

Google is turning more and more into a lead gen company every day. They have been testing something similar with insurance, hotel bookings and solar. Soon enough search results will be dominated by Google's lead capture pages/forms and those leads will be sold to 3+ companies.

If Google is confident about being able to capture the leads, they can make a lot more money from this approach vs what they make from a click.

If they continue to go more into this direction, would that make them more of a marketplace vs a search engine?

I... don't see a way to search by type of loan. You can't just say "I'm interested in a 30 year fixed" or whatever. That seems a bit crazy to me.

Once you have a list, there's a dropdown to filter by type of loan (defaults to 'All')

Thanks!

Google's relationship with the real estate industry has a history. At one point, you could see foreclosures on Google Maps. The real estate industry hated that, and Google took it out.

I tried their auto insurance comparison tool [1], and the UI is pretty decent/simple for comparison. Just wish it allowed for some better comparison - i.e., my current policy has comprehensive for my older car but all the recommended policies don't so prices will of course be off...

[1] https://www.google.com/compare/autoinsurance

Will they offer lower rates than Amerisave? I thought there was no room for improvement beyond them, but it would be interesting to know otherwise.

I refinanced through them and I check them from time to time to see current rates. I own a two-family house, and it is convenient that their web-site has an option to take this into account (rates slightly higher).

"M" is for mortgage?

"M" always has been, and always will be, for money.

I was part of the BeatThatQuote.com acquisition back in 2011. We built Google Compare UK and then the team eventually moved onto to building the US comparison products also. Great to see this progressing forward.

The service will be for like 500 people who still can afford (and are stupid enough) to buy real estate in California.

5 years ago Google had a very similar service, which was canceled in 2012. I wonder why they decided to resurrect it.

Yes - was based on acquisition of UK based http://www.beatthatquote.com. It is still in operation under Google's brand.

http://www.google.com/compare/mortgages

https://www.google.com/compare/autoinsurance

https://www.google.com/compare/creditcard

They did this for solar lead generation with project rooftop.

I noticed the website is not using a secure connection!

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