Blog

• New Mortgage Reviews on SmartHippo

  If you’re a regular visitor to SmartHippo, you may have noticed something new. SmartHippo now features consumer reviews of banks and mortgage companies front and center.

  Why are mortgage reviews important? In a volatile market, with mortgage rates changing on a daily basis (or even more, depending on the lender) we felt it was important to use the power of the community to not just compare mortgage rates but also consumer experiences with lenders.

  Consumer reviews include an overall rating as well as sub-ratings on the following aspects of their interaction with their lender:

  • Customer Service
  • Rate & loan terms
  • Closing terms disclosure
  • Closing process

  Here’s a sampling of mortgage reviews from last month:

  Quicken Loans

  • Overall a good experience

  US Bank

  • Bad experience with a car loan
  • Good service

  Orion Bank

  • Good mortgage rates but poor service

  ING DIRECT

  • No need to haggle with ING Direct

  HSBC Mortgage Corporation

  • Great service!

  Regions Bank

  • Regions Bank - Too Big For Small Town People

  Wells Fargo

  • NOT HAPPY!

  Do you have a mortgage experience you’d like to share with the SmartHippo community? Write a review and help the herd.

  August 11th, 2008 · No comments
• SmartHippo Named One of the Top Web 2.0 Companies by KPMG and Backbone Magazine

  SmartHippo was named one of the top 20 Web 2.0 Companies in Canada in the current issue of Backbone Magazine. The Web 2.0 Awards were an initiative of KPMG and Backbone Magazine.

  Here’s what the judges had to say about SmartHippo:

  This is a community-created site that compares rates on U.S. mortgages and other financial services.

  Forde and others pointed out that “this is a Canadian company that doesn’t offer a service Canadians can use” but the judges still found the basic idea to be solid. O’Connor Clarke pointed out that, in helping others save money, the founders might make some for themselves: “I think they’ll have a really nice exit, getting bought by someone smart and deep-pocketed.”

  You can find out more by reading the press release or the full article in Backbone Magazine.

  Thank you to all the members of the SmartHippo community without whom winning this award would not have been possible. We’ve been continually making improvements over the past several months, so if you haven’t stopped by in a while, try our compare mortgage rates engine and let us know what you think.

  July 15th, 2008 · No comments
• IndyMac Goes Bankrupt - What You Should Do Now

  By now, most of you have heard that the FDIC has taken over IndyMac Bank. IndyMac made its name in the industry by offering mortgages to consumers who were not able to document their income, and as loan defaults kept piling up, the bank was no longer able to stay afloat. The FDIC will continue to operate the bank under the name IndyMac Federal Bank for a transition period and then sell it back to the private sector.

  If you had money at IndyMac:

  • If you had $100,000 or less in the bank, your money is fully insured and you can withdraw it via check, ATM or at the branch.
  • About 10,000 customers had more than $100,000 in their accounts. If you are one of these people, the first $100,000 is safe, and the FDIC is advancing half of the remainder until a final settlement. Whether you get more depends on how much the FDIC can get for the bank’s assets when they return it to private hands.

  If you didn’t have any money at IndyMac:

  The FDIC maintains an internal watch list of some 90 banks that are in a precarious situation. They keep this list confidential, since publishing it could trigger a run on these banks which could them force them to go under.

  So use this as an opportunity to take what happened with IndyMac as a lesson and never keep more than $100,000 at the same institution.

  July 14th, 2008 · No comments
• Ed McMahon, Evander Holyfield at Risk of Foreclosure

  The mortgage crisis spares no one, or so it seems.

  First came news that pitchman Ed McMahon had defaulted on his $4.8 million mortgage with Countrywide. He explained his situation to CNN’s Larry King this way:

  If you spend more money than you make, you know what happens. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen.

  Then came news that heavyweight champion Evander Holyfeld was also at risk of foreclosure due to his defaulting on a $10 million loan from Washington Mutual.

  In the case of McMahon, being famous does have its advantages, however. He claims to have been trying to sell his home for two years with no takers. But after news broke of his ordeal, interest in purchasing him home — asking price $6.25 million — is up. In case you’re in the market, Trulia has details regarding the property.

  

  June 11th, 2008 · No comments
• RE Blogworld Announced for September

  Todd Carpenter has just announced RE Blogworld, a real estate and mortgage conference taking place September 19 in conjunction with Blogworld and New Media Expo (September 20 and 21) in Las Vegas.

  Are you a mortgage professional and still not sure if blogging is for you? Todd offers the following advice:

  In an environment where the prestige of being an agent or originator is no better than a used car salesman, there’s no better time to use blogging and new media as a platform for proving to your clients that you are different. I’ve seen it from my own efforts.

  I couldn’t agree more. As real estate (Zillow, Trulia, Eppraisal) and mortgage (SmartHippo) information becomes more freely available to anyone with an Internet connection, the role of a broker is shifting as well. Reputation and trust are more important than ever, and blogging is one of the cheapest and most effective ways of building these. Whether you have an existing blog, or are thinking about it but not sure where to start, RE Blogworld should be on your calendar this September.

  Check out the blog or subscribe to the RSS feed to keep up to date with RE Blogworld announcements.

  May 9th, 2008 · No comments
• California’s Next Mortgage Crisis

  With California being particularly hard hit by falling home prices (a 26% drop in February compared to the previous year), Slate suggests the next wave will be prime borrowers simply walking away from mortgages that no longer make financial sense.

  Lenders had no reservations about selling borrowers loans with rising payments that would be poisonous in a rising market. Now it seems borrowers have no reservations about leaving those lenders with the risks they begged to take.

  You can read the full article here.

  April 16th, 2008 · No comments
• The Upside Down American Dream

  The drop in real estate prices has left many Americans upside down — meaning they owe more on their mortgage than what their home is worth.

  Morgan at blownmortgage.com observes that some of these people have no problem making their payments, but are wondering if they should just walk away anyway. He says that for some, The American dream is no longer home ownership; It’s getting out of their home.

  Are you upside down? What do you think? Add your comments at the end of this post.

  April 7th, 2008 · 1 comment
• Zillow Mortgage is But a (Very) Small Step Forward

  
  Zillow today launched a mortgage product, which lets consumers anonymously request quotes from loan officers and decide who they want to go with.

  You can read more coverage on TechCrunch, Mashable, Lenderama and BusinessWeek.

  We’ve always believed strongly that the mortgage process needs to change in the interest of consumers. That’s why we launched SmartHippo last September at the TechCrunch40 conference. But Zillow’s new launch leaves us feeling kind of flat.

  To be sure, they are an improvement over lead generation sites like LendingTree or LowerMyBills, which essentially just sell off your personal data to the highest bidder. Zillow lets the consumer drive the process, but that’s where the differences end. So, in a sense, they are kind of like a LendingTree v 1.1. You still only get to see quotes from people in their network, and you still have no assurance that these quotes will be accurate.

  SmartHippo, on the other hand, is a completely new way of shopping for a mortgage. We are open and transparent. You can find rates supplied by both banks and individual consumers, and we have a community feedback mechanism that allows people to share experiences with and rate lenders and brokers whether they are member of our site or not.

  What do you think? Check out SmartHippo.com and let us know, and be sure to follow our demo at FinovateStartup on April 29th for something new.

  April 3rd, 2008 · No comments
• Can’t Save? Blame Your Brain

  The average American consumer has a negative savings rate — meaning they spend more than they earn. Why?

  Fascinating new research is brought to light in a recent article in Money Magazine:

  When you imagine choosing between making a quick buck or growing rich later, you know the right answer: Be patient and hold out for the bigger gain. But as soon as you face a real rather than an imaginary choice, the fast money seems irresistible.

  New discoveries in neuroscience labs are helping to explain why it’s so hard to resist the allure of instant gratification. It turns out that your brain is much more aroused by $1 today than by $1 tomorrow. And $1 six months from now barely registers.

  The article goes on to quote one of the study’s authors, Carnegie Mellon University’s George Loewenstein, as saying there may be an evolutionary component to our behavior when it comes to spending versus saving. It turns out that during hunter-gatherer days, people faced scarcity and learned to consume when they had the opportunity.

  When it’s time to close a mortgage, many of us don’t always go with the option that offers the best long-term financial gain. For instance, we may choose to pay a higher interest rate over the entire term of a mortgage in order to save a small amount of costs at closing.

  Now we have an excuse. We can blame our brain.

  March 22nd, 2008 · No comments
• Home Equity Falls to Lowest Level on Record: Federal Reserve

  According to an Associated Press report, home equity has now slipped to the lowest level since the Federal Reserve began tracking the statistic in 1945.

  Homeowners’ percentage of equity slipped to a revised lower 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent. That marks the first time homeowners’ debt on their houses exceeds their equity since the Fed started tracking the data in 1945.

  The total value of equity also fell for the third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.

  Home equity, which is equal to the percentage of a home’s market value minus mortgage-related debt, has steadily decreased even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans and lines of credit and an increase in 100 percent or more home financing.

  How much equity do you have in your home? How are you coping? Post your story in the comments.

  March 6th, 2008 · No comments