2009 July | RateWindow

radical The RateWindow CEO, Mark Warner, will be speaking at Inman this year. His panel’s topic is “Blowing Up the Black Box: How to Make Radical Transparency Work.” We’ve been working on mortgage transparency for a couples years now so I’ve read a lot of news/blogs about how professionals are trying to be transparent. One thing that catches my eye in most, is that along with the buzz word transparency, I also see words like revolutionary, radical, innovative. Being a web developer for over 10 years, I do realize that keyword buzz is important for promotion, and in most cases that is all these words are trying to do, create buzz. In my opinion, transparency is not radical nor revolutionary, especially when it comes to mortgages.

When I think of radical transparency I think of knowing everything about the person I’m dealing with. Have they been arrested, what’s their political views, whats their religion, who are their other clients, etc… That IS Radical transparency. RateWindow is not that.

Scenario:

You just found a home you like and what to buy it. For the next 30 days you are going to be involved with a lot of people. You need to trust them, but they don’t need to be radically transparent. Another keyword you hear all the time in mortgage is “NO HIDDEN FEES”. While I agree that there are absolutely no hidden fees in any mortgage transaction, there are bait and switch. When you close a loan the last thing you do is sign off on the closing statement. The last thing you want to see is a fee that you might, or might not have been told about on that sheet, because if you don’t sign it, you don’t close and will possibly lose the home.

Therefore, business level transparency is what I call it. For these 30 days I want complete business transparency with the person I’m dealing with. Below is what I want to know before closing day.

Flat Service Fee. I want to know exactly how much I will pay the mortgage broker in fees to get me my loan. Whether this is a flat fee of $3,000, or a percentage of the cost of the loan (1% of 300,000). This does not mean I want a “Discount broker” Flat service fees should go hand in hand with the amount of service I’m provided. I have no problem paying a higher fee for better service. I’m a true believer in you get what you pay for.
I want to see every rate. I don’t care if its 12% and 10 points… I want to know that I’m being shown everything. My life is not like your life, I might buy a house and live there for 2 years, or I might live in it for 20 years. In each case I will want either a higher or lower rate based on the amount I will spend over the life of the loan.

That’s not that radical is it? with only these two bits of information I am now more empowered to talk to my loan officer about MY loan. This is all it takes to raise the trust level in this business trasaction so I can rest assured I’m getting the best loan for me and my family.

Man, I do. That thrill of opening your front door for the first time after you sign the closing papers and realizing that everything you see is YOURS. It’s an incredibly liberating—and a little mind-blowing.

You’d think that with all of the doom and gloom in the news, no one would ever get to have that experience again. But according to a recent USA Today article, Stephanie Armour reports that first-time homebuyers are driving existing home sales. And that’s good news in many ways.

Second, as mentioned in Armour’s article, many homebuyers are choosing to purchase “distressed” houses—homes that have been foreclosed. Anyone who has driven by foreclosed property knows them instantly: the overgrown lawns, an obvious lack of maintenance, that feeling of abandonment. As distressed homes welcome their new owners, appearances improve—and neighborhoods become more desirable. And again, more people are willing to invest their time and money there.

Third, when a first-time homebuyer begins to invest in the home by remodeling or other efforts, it spurs other industries. In areas where home building and remodeling has slowed, this is a crucial factor in overall recovery. Every time a homebuyer makes the decision to install new flooring, change out a bathroom or repair drywall damaged by their home’s previous occupant, money starts flowing into the local economy. And that is a very, very good thing.

Today interest rates are at historic lows and there are credits for first-time homebuyers that we’ve never seen before. In short, there’s never been a better time for potential buyers to take that leap and make a home their own.

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