Lending tree

[Anonymous]

Has anybody ever done lending tree before? Should I try it out?

[ShanetheMortgageMan]

The best loan officers in this business do not need to participate in LendingTree, or other websites that re-sell people's information for profit ("leads" they are called).  The top loan officers in this business get their business from referrals from past clients, real estate agents, and other points of contact they make along the way.  They don't need to purchase LendingTree or LowerMyBills leads because they get plenty of business elsewhere.  

Odds are you already know of a good loan officer, or at least know someone who does.  Start by asking family, friends and co-workers who have purchased a home who their loan officer was and if they'd recommend them.  If none really liked their loan officer then asked if they liked their real estate agent, and get a loan officer recommendation from the real estate agent (hint: real estate agents likely won't pick idiot loan officers since their commission rides on the loan/real estate transaction being able to close).

There have also been plenty of other threads about LendingTree here in the mortgage section, just do a search and you'll find plenty of info on them. 

[Watchmann]

I don't think the average person knows a good loan officer.  Most people don't get into the real estate market very often.  I used Lending Tree back in 2003 to get a conventional loan.  I was moving to a new area, knew no one who could give me any references or leads, and had been living overseas for many years and hadn't owned a house in that time.  I looked around to find someone in my new location but was not impressed in their willingness to work with me, or with the rates.  So I used LT and got the four offers, and honed in on the one that looked the best and was the most upfront.  Got a 5%, 15 year fixed rate loan with very low fees and closing costs.  The whole process went as smooth as silk, so it worked for me.  But that was before all the current shenanigans took root so maybe times have changed with LT.  I wouldn't rule them out, but I'd use them as another set of data points.  I think they can be useful if you aren't in a position to find a loan source by yourself. 

Message Edited by Watchmann on 03-29-2009 10:51 AM

[Anonymous]

How did I know who a good loan officer was? I'd never bought a house before.

I found my loan broker via Lending Tree. Then I did due diligence, and asked a few real-estate people I knew personally (this was a "by owner" sale, so none had a stake in the matter) about him. Contrary to Shane's expectation, everyone who knew of him gave positive reviews. Maybe even the good ones were trolling Lending Tree in early January, when nobody was buying houses, and the real-estate market naysayers were ubiquitous. I don't know -- I just know my experience was absolutely positive. So, maybe there really good ones use every means available to get clients.

[ShanetheMortgageMan]

Unfortunately loan officers hardly have a say if they use LendingTree leads or not.  LendingTree costs a LOT of money each month go recieve leads from, a per lead cost and a significant "split" of each loan commission generated, and management makes the decision on where their business is going to come from, and then each loan officer might have the option to use them or not (some companies force calling their internet leads).  It doesn't mean by putting your information on LendingTree's website you won't receive a great deal, or there aren't good loan officers that receive LendingTree leads, but the good loan officer is a side effect of the mortgage companies decision to use LendingTree as a way to get business.... not good loan officers use LendingTree leads.

Now when you go on LendingTree aren't you expecting multiple offers from different banks?  Different banks is the key right?   Otherwise how would there be competition if it was just 1 bank?  Well LendingTree sells you a concept and then goes right around and does the opposite.  There was a lawsuit awhile back and I'm not sure if it was won or not, but it purported that instead of LendingTree selling your information to 4 different banks, it was rerouted to their in-house lending division, called HomeLoanCenter, where they picked their four best programs (let's just call them program A, B, C & D) and offered them to you. LendingTree finally figured out that they can make a buttload more money actually doing the mortgage instead of selling your information to their lead buyers.  This created a conflict of interest on so two levels - the consumer (you) and other client (the mortgage company).  The consumer who thought they were going to talk to 4 different banks to get quotes (mortgage companies don't go over every option doing a little song and dance, they'll go over the best option for you and probably tell you why the other options are not as good of a fit, but not actually offer them to you).  Let's say that program A is the best program in terms of fees/points, you would want to know what Banks 1, 2, 3 & 4 could offer on program A, right?  Not just Bank 1 program A.  Not everyone was sent to HomeLoanCenter to get all 4 quotes from them only, because my friends who worked for other mortgage companies still were getting their LendingTree leads, but there was some sort of selection process for specific people to get rerouted to HomeLoanCenter instead - perhaps that selection process was who they could make the most profit on?  Well you can imagine how their clients, who are paying gobs of money ($200-300+ per closed lead), felt about this, because perhaps those consumers being routed to HomeLoanCenter would also be the one they could make the most profit on.

http://www.bizjournals.com/charlotte/stories/2006/10/09/daily31.html

I have intimate knowledge of this because my wife worked for LendingTree's mortgage division, called HomeLoanCenter, here in Irvine for a couple years.  At first they were just called HomeLoanCenter, and were just 1 of the 4 companies competiting for your business, but then the model evolved to have HomeLoanCenter co-labeled as "LendingTree" when Anthony Hseih made the deal back in 2004.

http://www.lendingtree.com/about-us/press-room/news-releases/2004/lendingtree-home-loan-center/ 

The last problem with any lead website, not just LendingTree (and I don't think this is a big issue at LendingTree either), is that there are companies out there that are "lead miners".  These are companies which will sign up as a lender to receive leads from a lead company, then re-sell that information to other mortgage companies.  So if you put your informaton on "Trusted Website", and perhaps "Trusted Website" didn't quite do as much due dilligence on one of their clients as they should have, your information (social security number, name, address) is floating out there for who knows who to get.  Don't believe me?  I actually get offers to buy thousands of leads for $1 each, that are anywhere from 30-180 days old, you can just search the internet for these deals too - no verification of who you are required, you could be a serial killer or identity theft guru and still be able to purchase this information... do you want your information out there 1.5 years from now getting phone calls and emails about a mortgage you inquired about?  Or worse?  Odds are if you go to LendingTree that won't happen, as their screening process is very detailed, they just don't sign up anyone, and their tracking system is very advanced too..  but if you do not know the person on the other end of the website who will be getting your personal information - do a little research first.  Google is your friend, asking questions is your friend, the FICO forums are your friend.

Message Edited by ShanetheMortgageMan on 03-30-2009 12:40 AM