The process for purchasing/selling property in this country is ripe for advancement. A lot of people are making a lot of money for doing very little, thanks to "tradition," proprietary data, and vested interests. Here is an interesting website that attempts some minor change.
Getting Wise to Mortgages
New Tools Help Decode Jargon, Sniff Out Deals;
Avoiding the Camel Market
February 4, 2006
A few entrepreneurs are developing new tools to help home buyers tackle one of the most confusing projects they face: figuring out whether a mortgage is a fair deal.
The problem for borrowers is that lenders have a vested interest in making it tough to compare rival offerings.
"The general public, they think they know how to shop for mortgages," says Mike Stoffer, who owns a mortgage brokerage in North Canton, Ohio. "They have no clue."
Some entrepreneurs are stepping in to give consumers some added muscle. One of the quirkiest tools available is a Web site, www.mtgprofessor.com1, by a maverick retired finance professor who has made a hobby of skewering mortgage lenders. The site is a compilation of tutorials, calculators and a glossary defining everything from "balloon mortgage" (one that is payable in full at an early date) to "right of recission" (your right to back out of a refinancing within three days of closing).
It also has some tart words for rogue lenders from Jack M. Guttentag, the Wharton professor emeritus behind the site. Example: In one passage, he compares parts of the mortgage market with a camel bazaar -- except that the chances of being fleeced by a camel dealer are smaller.
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In many cases, lending officers or mortgage brokers get more compensation if they persuade you to take a loan with a higher rate or fees. Like any savvy salesperson, they can spot customers who are naive or disinclined to shop around and jack up their profit margins accordingly. James Nabors II, president of the National Association of Mortgage Brokers, says that mortgage brokers have "an ethical responsibility" to treat all customers equally and fairly and make sure they understand the loan they are getting into. Mr. Guttentag examined 774 loans a few years ago and found that two-thirds involved overcharges, rates above the best rate available on the lender's internal daily pricing sheet.
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For individuals willing to do more research and punch their personal data into a computer, it often makes sense to deal directly with online lenders rather than brokers or bank branches, particularly if you aren't looking for something exotic, Mr. Guttentag says. That is partly because online lenders can eliminate certain costs, such as commissions, by reaching customers through the Internet, and then pass some of those savings on to borrowers.
Many people will never have the time to even begin figuring out all the tricks of the mortgage trade. That is why Mr. Lazerson, who owns a mortgage brokerage in Laguna Niguel, Calif., says he plans to introduce later this year software designed to enable some consumers to type in their financial details and then get firm offers from several lenders, without revealing their name, address or Social Security number. One advantage is that consumers aren't then flooded with unwanted marketing material.
