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ZILLOW, on FHA Quotes, YOU are part of the problem

Clay Branch, "Georgia Loans"
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Clay Branch, "Georgia Loans"

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Zillow, after seeing Ernie's post this morning being warned his APR is wrong, I looked at some of his FHA quotes. What I found is that you calculate the APR too high on ALL manual quotes and some API quoters are too high, also. The correct calculation for APR is based on the MI to fall off after the loan balance reaches 78% LTV, you are calculating the APR with MI through the entire 30 years. On Gregorios quote, you show his APR at 6.337% and the correct APR is 6.045%, and I know his quote is manual. Earnie's quote shows 6.560 and correct APR is 6.285%, and I believe his quote is API. They are not all off that much, here are the rest of the FHA quotes.

Seiler Real Estate - 6.726 - actual = 6.460
Save Financial - 6.349 - actual = 6.060
Bank of KC - 6.253 actual = 6.286
HITECH Lending - 6.006 actual = 6.027
Bank Mortgage - 6.092 actual = 6.114

FHA Quotes

Zillow, please adjust your calculator with the mi canceling at 78% so the manual quotes are not penalized.

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June 07 - US

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Gregorio Denny, "Gregorio Denny"
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Gregorio Denny, "Gregorio Denny"

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Well that explains why even when you have the lowest rate and fees it may still looks like you have the highest APR. Not exactly value added service for the Zillow consumers that shop based on APR.

Maybe we can get a response to this thread and a solution so those of us that still believe in the personal touch can once again be competitive.

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June 07

Bob Lowery, "Bob Lowery"
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Bob Lowery, "Bob Lowery"

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Nice job Clay!!

I wish I could give more than one thumbs up!!!

This really needs to be corrected.

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June 07

Ray R. Stevens, "My Faith First"
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Ray R. Stevens, "My Faith First"

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I have to give you one also. Nice analysis. Hopefully, Zillow will correct.

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June 07

Nate Moch, "Nate"
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Nate Moch, "Nate"

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Clay,
Thank you very much for your feedback. I will look into this today. It could be a bug in our calculator. If that is the case, we will try to get it fixed as soon as possible.
Thanks,
Nate

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June 08

Rudi Hofmann, "CA UMB"
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Rudi Hofmann, "CA UMB"

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Good work Clay! ... Happy funding, Rudi

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June 08

Lynda Mckenzie, "Lynda Mckenzie"
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Lynda Mckenzie, "Lynda Mckenzie"

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Thanks for bringing this to their attention. I hope it is something they can correct.

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June 10

Mary Miller, "MaryM"
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Mary Miller, "MaryM"

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Thank you for highlighting this FHA APR issue. Last night we released some changes to the APR calculations that address this problem. If you continue to see discrepancies, please flag the quote(s) and we will follow up asap. Thank you for your patience while we investigated and responded to this issue.

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June 18

Clay Branch, "Georgia Loans"
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APR OFF

Thanks for addressing the APR problem, FHA quotes look consistent now. This APR cant be correct because in the notes it says rate is based on 1 discount point ( $3400 ) BUT not listed in the fees so it is not being factored into APR and quote shows way lower fee total. How can Zillow fix this problem, :)

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June 19

Clay Branch, "Georgia Loans"
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Here is another problem, on this quote there are 4 conventional quotes with the following monthly MI charge:
Bank Mortgage - $170
Lafayette Credit Union - $69
Xceed Credit Union - $277
First Meridian - $170
The only way to have different monthly mortgage insurance is if the quoter can apply the MI factor, which a manual quoter can not do. Since mortgage insurance has the largest affect on APR, it is a problem too. The $69 monthly adds .054 to the APR, $170 adds .135 and $277 adds .221. That does not look big because this is less than 85% LTV, but on a higher LTV the difference will be much wider.

Different MI Factors

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June 19

Bob Lowery, "Bob Lowery"
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Clay, we are having same issue up here in Maryland with this quoter... Hopefully, it will be dealt with as this is an ongoing problem....

More of the same

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June 19

Nic Netherton, "ColoradoLender"
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Quote

Mary, can you please help verify this quote? 4.875% 30 year with .5 discount?

Thanks

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June 19

Nic Netherton, "ColoradoLender"
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Nic Netherton, "ColoradoLender"

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Quote

Oops here's the 30 year. Both inaccurate but here's the 30 yr.

Thanks Mary.

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June 19

Nate Moch, "Nate"
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Nate Moch, "Nate"

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Clay, Nic, Bob,

The MI issue should have been fixed with the release last week. Please let us know if you still are seeing issues on new loan requests. The example you gave was from earlier in the week before the fix went out.

Regarding the other quotes you linked to, I wish we could put a fix in place for them:) Please continue to flag them for CS. We appreciate your help in calling out inaccurate quotes.

Thanks,
Nate

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June 22

Eric Patterson, "Eric Patterson"
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Eric Patterson, "Eric Patterson"

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Nic, that 30 Year quote at 7:12 am was a mistake on my part. If you read the lender note I'm clearly describing a 15 Year Fixed but for some reason when I used my "saved" Conforming 15 Year Fixed loan scenario it uploaded the 30 Year Fixed costs. I'm still new to the system and have been more diligent in reviewing the "saved" loan quotes before clicking submit.

The second quote posted at 8:46 am is the corrected version of the above quote and is still valid as of 6/22/09. Feel free to check TB&W rate sheets on that day to confirm the pricing.

Could someone please tell me why we can't delete our own loan quotes?

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June 22

Clay Branch, "Georgia Loans"
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You can delete them, pull the quote up and delete quote is on the left with a red flag on it. It will ask you if you are sure you want to delete.

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June 22

Eric Patterson, "Eric Patterson"
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Eric Patterson, "Eric Patterson"

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Thanks Clay!

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June 22

Clay Branch, "Georgia Loans"
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Nate, this quote is from 6/22. There are 3 different mortgage insurance monthly payments between the quotes, from $119/mo, $185/mo, to $234/month. That can only mean the quoter is determining the MI factor which controls the payment and APR. In other words, if 2 quoters both have a rate of 5.5% and one has the $119 MI payment and the other has the $234 payment, the one with the $119 will always have the lowest payment and APR.

6/22/09

I agree the FHA quotes look much better and consistent.

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June 22

Nate Moch, "Nate"
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Nate Moch, "Nate"

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Eric,
Thanks for fixing your quotes.

Clay,
We allow lenders to pass in MI rates through the API. However, they can only pass in MI rates that are equal to or higher than those estimated by Zillow. This means they can only increase their APRs, which makes them equal to or less competitive than the manual quotes. In the example you gave, Zillow estimated $119 and some lenders decided to pass in higher MI numbers.

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June 22

Clay Branch, "Georgia Loans"
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Clay Branch, "Georgia Loans"

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That explains that, good! Thanks for working on and fixing the APR issue, it was bothering many here.

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June 23

Nic Netherton, "ColoradoLender"
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Thanks Nate,

Can you also please shed some light on why the site is allowing conventional purchase quotes over 95% loan to value? I see for some reason you are allowing refinance quotes over this level with the thought that maybe it would qualify for the HARP program but allowing the purchase quotes to stand makes no sense at all.

And secondly are there any ramifications for repeat offenders or are the quotes just deleted?

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June 23

David Gibbons, "DavidG"
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David Gibbons, "DavidG"

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Nic -

Refi's are now capped at 105% LTV because of HARP but purchases have always been at 100%. The FHA limit for purchases is actually up to 98.75%.Impossible quotes are investigated and repeat offenders do lose access to ZMM.

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June 23

Nic Netherton, "ColoradoLender"
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Nic Netherton, "ColoradoLender"

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Hi David,

FHA purchase LTV is actually capped at 96.5%. 3.5% down is required, the 1.75% UFMIP is financed on top of the 96.5%. Don't know where you are getting 98.25%. The quotes in question are in excess of 95% conventional which are not deliverable they do this to make it look cheaper because the UFMIP is not on the conventioal loans.

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June 23

David Gibbons, "DavidG"
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David Gibbons, "DavidG"

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Nic -

"FHA purchase LTV is actually capped at 96.5%."

Do you have a reference for that? Everything I read says that even streamlined FHA is capped at up to 98,75% depending on the down payment.

You should absolutely flag conventional quotes in excess of 95% and repeat offenders who can't back up those quotes will lose access to ZMM.

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June 23

Gregorio Denny, "Gregorio Denny"
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It's actually appalling that Zillow does not know the correct FHA guidelines. Please check here.

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June 23

Nic Netherton, "ColoradoLender"
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Not real sure what that site is referencing but would suggest getting information on FHAs from www.hud.gov instead of some company's site. Looks as if they may be refering to the FHA Secure program which doesn't apply here.

Purchase FHA loans 96.5%

Refinance FHA rate and term 97.75%

FHA streamline N/A (no appraisal)

FHA cash out 85%

Have been flagging the same offender for about a month now who quotes conventional on requests over 95%. Still doing it as of this morning.

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June 23

Clay Branch, "Georgia Loans"
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Nics numbers are correct. I dont know of a soul who qualified and actually closed an FHA Secure loan, if they did more power to them.

David, Mortgage 1A is a lead generation site that will say anything to get a name and phone # to sell.

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June 23

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ZILLOW, on FHA Quotes, YOU are part of the problem

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