Currently viewing the tag: "service providers"

Last week I wrote about the value of service professionals guiding consumers through a complicated purchasing process – like getting a mortgage. It’s just as vital that consumers find the right service professionals because bad or unclear advice can be worse than seeking no advice at all.

In reacting to the same survey we highlighted about consumer confusion in the mortgage process, Alex Stenback of Behind the Mortgage wrote, if getting a mortgage turns into a headache “…you might have just picked the wrong lender (think person, not organization here).”

Stenback mostly harps on getting quality customer service, especially in terms of clear and frequent communication from salesperson to borrower.  That’s definitely important, but a slick salesperson can provide great customer service superficially while still overcharging the borrower.  This is why trust is so important – there is simply no way (except comparison shopping) that the average consumer can evaluate the deal they are receiving from a mortgage lender.

The wrong lender can end up costing consumers a lot of money and – in too many cases recently – their home as well, whether it was after a teaser rate spiked or the borrower just realized they had taken out a loan they never could have afforded. Incentives for lenders are not often designed to encourage them to get their customers in the appropriate-sized loan at the lowest rate possible. The more someone pays in fees or a higher interest rate, the more the salesperson makes, and in some cases a LOT more.  (Note: Congress has taken up legislation to curb these types of incentives but the efficacy of such efforts remains to be seen.)

The problem is it may be easy to determine you picked the wrong lender after the damage is done, but how do you find the right lender before any decisions are made?  If you are like most people, you ask your friends for a personal recommendation. Studies have backed this logical process, showing that people get better deals from people they know or someone with whom they share a connection. So if you don’t know a mortgage lender then you might ask your close friends if they know someone. If they do then great, you’re in business. But the reality is reaching out beyond a few dozen email contacts is a time consuming process, and often yields little results. So a lot of people don’t find that connection and end up walking blind into a bank off the street.

At we’ve given consumers the opportunity to reach more trusted sources of recommendations with a lot less effort. We’ve discussed the benefits of this to sales professionals before, but consumers are also a big winner here.

Finding the mortgage banker that is recommended by one or more of their friends, as opposed to opening a dialogue with a stranger, is a great way for consumers to ensure they’re getting started with the right professional.

It’s no surprise that consumers said understanding the mortgage process is the most difficult step in getting a mortgage in a recent survey. What is surprising – and troubling – is that many people are just pointing mortgage shoppers to websites where they are left to educate themselves on the process.

Given that most of us do not have the time, energy or expertise to wade through complex financial jargon, it’s time we moved passed the web 1.0 paradigm that empowers the individual with increased access to information.  The next generation of the web is built on personal connections, and it is time we recognized the value of trusted service providers and leveraged our new technology to help consumers connect with them for their most important purchasing decisions.

Consider this story the New York Times reported last week that many mortgage sites are trying to dumb down their content for confused consumers.

“We shoot for a ninth-grade reading level for everything we put on the Web,” Arturo Perez, a home loans marketing executive at Bank of America said in the story.

But would you trust a ninth grader to choose between a fixed and floating interest rate? Of course not.

Removing jargon and writing clearly should be applauded, but let’s not pretend we can take an incredibly complex topic and make it easily digestible for a braces clad audience  struggling with multiplication tables.

The same New York Times story reported that:

A poll of more than 1,300 homeowners conducted by Harris Interactive, a market research firm, for LendingTree, and published in December, found that while 96 percent of Americans comparison-shopped for “anything,” only 61 percent said they did so for mortgages. The remaining 39 percent took out home loans based on just one quote — even though 9 in 10 of those buyers said they knew that rates varied among lenders.

Consumers clearly have instincts for comparison shopping, and they don’t dissipate when they start shopping for a mortgage, but they often just don’t know where to look.

This is why we need service providers that we can trust – to decode the complexities of the process and explain it to us with our best interest at heart. At we’re helping consumers find multiple mortgage bankers, brokers and realtors who can do that by searching the shopper’s social graph. We encourage consumers to do comparison shopping but to start with people you can trust.

It’s about time someone started championing the service professionals and their value, instead of working to eliminate them with half-baked information-based solutions designed for seasoned practitioners and not everyday people.