A message to Zillow mortgage shoppers.

Dear Zillow mortgage shopper,

Recently, Zillow made changes to the way confirmed lenders issue quotes on this site. Before this change, mortgage quotes only included the "Lender Fees". These are the fees that show up on your Good Faith Estimate from lines 800 to 900. These are the fees that are directly in control of your broker or lender and are the fees that should be used for comparison when evaluating quotes.

With the latest changes, confirmed lenders should now be quoting title and escrow fees as part of your quote request and disclosing FHA loans versus conventional. . These title and escrow fees vary greatly by geographic location, by local law, and by local custom. While the honest lenders here will make every effort to estimate these fees for you, it is only an estimate and should be viewed as such. Some lenders have refused to include these fees as part of their quotes to you and these quotes with missing fees, may at face value, appear to be a better deal.

  • November 02 2008 - US
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Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (14)

With the new quoting system, there is no reason that you should not receive a quote that attempts to estimate all fees that you will likely encounter. Should you receive a quote that does not disclose title or escrow fees, we ask that you disregard it since it is impossible to achieve. Those that have decided not to disclose these fees do so for competitive advantage and no other reason. They are hoping that you are just looking at the bottom line and not the big picture. Rest assured that when you get an actual Good Faith Estimate from them, there will be fees listed that were not disclosed in your Zillow quote. If all you are seeing on your quotes are fees with line numbers in the 800's, you are not receiving an accurate quote. If you are not sure what you should be looking for, Zillow provides a list of typical closing fees that can guide you in the right direction.

Please know that there are many mortgage professionals on this site that are honest and reputable and will deliver on what they quote and I expect that you will find many of them responding to this post. We encourage you to contact the lenders that do not properly disclose fees and ask them why they chose not to. We all want a system where consumers can feel their best interests are being protected, but we need your help. We need you to be able to spot what is a good deal and what is not and to question the methods of those who refuse to conform to proper ethical standards.

Thanks.

  • November 02 2008
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Gregorio,

No one could have said it better.  Thank you. 

So, can all of us (Zillow Lenders) join in and quote all the necessarr fees with a disclaimer that fees can and will vary depending upon title company (commonly referred to by many as escrow company), what the seller and buyer agree to pay on a purchase?

 

  • November 02 2008
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Profile picture for Steve Loynd

We all understand disclosure in the real estate business :brokers, clients, and customers alike need to ask what other fees are there (hidden or other-wise). That discussion aside, what is the justification of rates being higher this week than last after a rate cut by the Fed. If member banks can borrow at 1.5-to1.75% why haven't the consumers gotten a rate drop as well. I have a 5.6% 30 yr mortgage I got 5 years ago. Tell me the banks aren't being greedy and trying to make up for past losses. The Mortgage industry might as well be OPEC, setting prices and driving up costs when recovery of our economic ship should be in order for the banking business. I say make sure the borrowers are qualified, but then give them a good rate and some of the unsold real estate inventory will start to move.

  • November 02 2008
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Steve,

Are you kidding all of us by your post?

You really think a drop in the overnight rate goes hand-in-hand with a reduction in mortgage rates?

Go back and read your Macro Economics text from anyone's freshman year in college: Econ 101.

Man, I hope this is not what you are saying to borrowers.

  • November 02 2008
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Steve,

 

This was a post for mortgage professionals, not real estate professionals.  Gregorio's post was insight for the consumer. 

  • November 02 2008
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Profile picture for Dallas Banker

Wow, no wonder it's so hard to educate the consumer when you see posts like that!

 

 

  • November 02 2008
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Steve,

You are a managing Real Estate Broker with 25 years under your belt and you make a post like that?  Is this any indication on the quality of your CE courses spanning 25 years that you don't know what creates lower or higher mortgage rates?  Don't foul up this thread as it was made for the consumer's protection and not to show them your lack of knowledge.

  • November 02 2008
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Gee Steve, thanks for Hijacking what was intended to be an educational post.

 

I'd really like to stay on topic please.

 

  • November 02 2008
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Steve,

 

I hope you don't make recomendations to your clients about rates.  Based on what you posted you have absolutely no clue as to how mortgage rates are set!

 

The fed funds rate has nothing to do with mortgage rates.  Mortgage rates are based on mortgage backed securities....nothing else!  When the 6% coupon gets to 101 that might be a realistic rate.  I suggest sitting down with a good lender that might be able explain mortgage rates 101.  If I seem irritated I am....I would hope that someone in the business would have a basic knowedge of mortgage rates.  If as a realtor you don't the last thing you should be doing is offering up commentary on rates!

 

Current MBS Price

 

Fannie Mae 6.0% - 30 year Up 5 at 99.937

  • November 02 2008
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Profile picture for Dave Pressel
Steve,

Fed Funds / Prime is SHORT TERM money. Any reduction in this index affects things such as car loans, credit card rates, 2nd mortgage HELOC rates. Mortgage rates are based on longer term money indicies. As that yield rises on those, so do mortgage rates.

DP
  • November 02 2008
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The source of this graph is HSH.com. This graph shows the correlation between the Fed Funds Rate (red line), the Prime Rate (gray line), the 30 year fixed rate (blue line), and the 15 year fixed rate (green line). Notice something? Yeah, that's right, we lenders have absolutely no control over mortgage interest rates. And, mortgage rates do NOT follow the Fed Funds Rate. The Prime Rate does. The Fed Funds Rate is the overnight rate banks charge each other.

 

To track mortgage rate, you must track Mortgage Back Securities (MBS). Mortgage interest rates are determined by the price of MBSs at any certain given point in time, and are based on numerous economic, financial and credit based factors that adjust daily.

 

Hope this helps.

  • November 02 2008
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Bumped because I think it's important.

  • November 03 2008
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Profile picture for NorthpointeBank

I also like that he assumes that there is no risk premium for lenders providing loans to home owners vs lending to other banks or the government. I mean what is the difference really?

 

Additionally on a common sense basis would thousands of lenders be on zillow and be quoting a higher rate if the market was fixed? I mean don't you think that one of us might give away the secret of the magic mortgage rate to punch up production numbers for the month? Don't you think that one bank would let you in on the magic rate to draw in new business?

 

Confusing and worrying. I am just not sure which feeling takes presedence. I am hoping this can just be marked up to the fact that you are struggling with a challenging environment like many of us.

  • November 04 2008
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Great post Gregorio.  I have only made a couple of quotes since the system was adjusted.  I wasn't including the new fees because I noted that I would include them on the GFE and figured if it got to that point I could get accurate quotes rather than just estimating.  Now that I have jumped back on the threads and see that it's become such a hot issue, I will definately include them in the future.

 

Take it easy on Steve... consumers don't always understand the business.  What?  He's an agent?  Oh, well a new agent can't be expected to know everything.  What?  He's been in the business 25 years?  He's a managing broker?  Yikes

 

Oh well, at least he was able to let us know how great his rate is.

  • November 04 2008
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