

Cringely's subscription-based mortgage refinancing startup - tptacek
http://www.cringely.com/2009/03/so-that%e2%80%99s-why-he%e2%80%99s-so-interested-in-mortgages/

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Brushfire
I think its fair to say that this looks pretty interesting. The domain reads
like a bad spam domain, though. Did someone skip the chapter on branding?

I did walk through their mortgage evaluator. The process was pretty
straightforward, and they didnt ask for any upfront personal information like
most of the scam mortgage sites out there.

I'm not sure I'm ready to pay $10 for mortgage assistance, but this might be
an interesting thing to do if I was actually buying a home. I'm definitely
going to keep it in the bookmarks, but I'm curious how they plan to keep
people paying the $10/mo over the long haul. Traditionally, real estate
services, and also paid review sites like Angielist have very high churn rate.
People sign up, get the info they want, and then unsubscribe. Rinse repeat
every 12-18 months when they need something.

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zandorg
Yes, I LOL'd at that domain once I saw it.

Don't forget the dash, kids....

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henning
I have some recommendations for making it look more questionable:

1\. Switch to .info domain name 2\. Homepage should have more color and more
gratuitous animation - maybe seek out Matthew Lesko's people? 3\. There's a
contact link at the bottom of the page - remove that so no one has any idea
who the hell is behind it.

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ratsbane
Mortgage brokers can make money from both the up-front fees they collect from
customers as well as fees which they sometimes receive from the wholesale
mortgage lenders who actually provide the money for the loans. The up-front
fees are revealed to the customer and the other fees are not. They can be in
the thousands of dollars.

I did some database work for several retail mortgage providers several years
ago; it's possible this has changed now but I rather doubt it. At that time,
as I learned how the system worked, I was a bit shocked and thought the whole
mortgage business seemed very dodgy though everyone assured me that's just how
the industry worked.

I wonder if Cringely's service is making this "money on the backside" (that's
what they call it) or if the $10/month subscription is really all they get?

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wmeredith
They deny this "backside" money pretty emphatically on their home page.
However, the mortgage industry's reputation is so shredded at this point that
I scarcely believe them for no other reason than they're in the mortgage
business.

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siculars
If it is true that they help you monitor your identity and credit score and on
top of that help you strategize ways to better position yourself not only
credit wise but also mortgage wise, I could see the benefit in remaining
subscribed.

As a home owner and someone who has been through more than one refinance
process it is nice to work with an organization that is not beholden to the
other side of the equation - the lenders. This model is incentivized to more
favorably aligned with my interests.

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jeroen
The problem to be solved was "it was in the interest of the lender to keep
mortgage holders owing as much as possible for as long as possible".

The broker solved that by having his customers pay him a one time fee, which
aligns their interests: now they both want the loan to be paid off as soon as
possible. It saves the customer money and the broker time.

And then Cringely changes the one time fee to a monthly payment, which seems
to me like going back to square one. Home-Account is motivated to improve your
situation just enough to keep you a happy customer, but also to keep you as a
customer for as long as possible.

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rms
Did you read the whole post?

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jeroen
I did. Any chance you'll honour me with a helpful reply?

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rms
The product home-account says they are providing is not a "let's improve their
situation enough to make them a happy customer" but something that claims to
be a mathematically optimal way of refinancing your home mortage. Then they
will tell you when it becomes optimal to refinance your home again. Already
they hint that they will begin competing with mint.com so eventually they'll
provide lots of useful services.

The monthly payment is not a bad thing. It makes it much, much cheaper for the
customers. It does not change it so the service will suddenly mislead their
customers about the best thing to do for their finances.

