When Minnesota mortgage professional David Prouty tried to find 100 percent financing on a loan for a friend, it took hours of searching online, more than 10 phone calls and 10 days of searching – and that’s how Bid4Mortgage was born.
“A local police officer called me and said he found a lot he wanted to buy with as little money down as possible. The best I could find online was 20 percent down. I contacted a lot of my broker friends, and 10 days later, found 100 percent financing,” said Prouty, founder and CEO of Lakeville, Minn.-based Bid4Mortgage.
“It took me 10 days to do it, and I’m in the business. It would have taken this guy a much longer time to find it – if at all,” Prouty said. With that in mind, Prouty started his service.
The concept behind Bid4Mortgage, which launched a mere 17 days ago, isn’t new. As with its predecessor LendingTree, lenders compete for clients by sending them offers and clients pick the best offer themselves. And as with sites like RealtyBaron, real estate agents using the service bid for clients by offering a selling commission rate.
Consumers who visit Bid4Mortgage don’t have to give up personal data such as Social Security numbers, and they remain anonymous to the brokers and agents until the consumers make their choice.
Many similar lead services in real estate will send the consumer inquiry to the agent who purchased the rights to the ZIP code. Whereas, the way Prouty has set up his new service, consumers make the choices, he said.
Though the site is named Bid4Mortgage, consumers can also use it to find real estate agents. “Consumers who want a cabin in the northern part of the state, for example, or people who are relocating, can find agents here,” Prouty said.
The mortgage process goes like this:
A consumer seeking a loan signs up and specifies what he or she is looking for: 30, 15 or 10-year mortgage; fixed or adjustable rate; first-time buyer or not; length of time in current home; credit history; annual income, given as a range; monthly debt; employment and bankruptcy status; total assets; whether seeking a single-family residence; price range, borrowing amount and down payment.
Information such as Social Security numbers or employer’s names is not requested.
After providing this information, the new member’s e-mail address is confirmed. Loan officers then get e-mails informing them that a potential borrower has signed up, without identifying the borrower. The lenders then visit the site and view the wannabe borrower’s information and make their bid.
“After a full business day, the consumer is notified via e-mail that bids have been made,” Prouty said. “The consumer can then go back to the site and view the bids that have been made. At this point, the bidders themselves are also anonymous. The consumer can choose up to four bids for viewing.”
At that point, Prouty said, the consumer can look at the four bids as well as the associated “Why Pick Me?” pages, which each loan officer creates for himself or herself, complete with bio, logo and information about their company and its services
Then, when the consumer makes the decision, he or she can contact the loan officer.
So far, in the 17 days since launch, 22 consumers have visited the site, most of them looking for loans, and 14 loan officers and real estate agents have signed up to provide services, Prouty said.
Another feature of the service is what Prouty calls “a little eBay-ish.” Consumers are able to rate members of the site, whether brokers or agents. “Did he close on time, did you get the rate and closing costs you expected? Once the transaction is complete, borrowers can rate their lenders.”
“Everything’s rolling along smoothly,” said Asea Cole, a loan officer with U.S. Bank Home Mortgage in Roseville, Minn., who has signed up to provide services on the site. “I get notification through e-mail that someone is asking for a bid and I can respond to it. I have not been selected as a top lender yet, but I’ve gone through the bidding process.”
Cole said she wasn’t afraid to try out the service because she knows Prouty, who has been a real estate broker since 1999 and a mortgage professional since 1997, through the business community.
“We’re still working out the kinks. He’s been awesome in responding to me,” she said. “Every company has a different way of pricing the mortgages. We’re working it out.”
So far, Cole said she is pleased with the process. “It seems like an easy way to get leads,” she said.
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