Web 2.0 is usually defined as a new version of the world wide web where platforms are utilized that promote user generated content. The comments section of this blog is one example. You Tube, Facebook, and MySpace quite famously personify web 2.0.
When it comes to real estate, a prime example of web 2.0, or in this case Real Estate 2.0, is Zillow. Poke around Zillow’s web site and you’ll see discussion forums, wikis, user contributed data on properties, and even a blog of their own. Zillow wants to enter the mortgage space, and they may end up representing mortgage 2.0 as well as they do real estate 2.0. If they act fast enough, they could even shape the definition of Mortgage 2.0. Because up until now, it largely doesn’t exist.
One early example comes from Smart Hippo. They’ve taken the rate shopping model and added a layer of user generated content by allowing visitors to compare qualified offers based on similar credit and income profiles. They also offer a rating system for how well a lender follows through on a promise.
I really like this idea, but a big hurdle for any Mortgage 2.0 site is that borrowers represent a very weak community. A social network of potential borrowers is limited because the vast majority of participants have no long term commitment to contributing to the community. People are only interested in mortgages when they want to buy a new home, or refinance an existing one. There’s always going to be a high level of transience in such a network. Because of the volatile nature of mortgage rates, this transience may not be that much of a problem (old data is not all that relevant when it comes to the market). However, the community will only ever be as strong as the participants contributing to the network at any particular time.
Individual bloggers have taken up blogging to communicate with potential clients. But blogging, in itself, is just a distribution platform. The “2.0″ in blogging comes when readers start to comment. That really doesn’t happen on most mortgage blogs. Some mortgage bloggers even go so far as to ban comments. I see individual originators who use web 2.0 tools, but not a true Mortgage 2.0 solution.
I think Smart Hippo is a great step towards bringing transparency to the mortgage industry. I also think blogs are one of the absolute best ways for loan originators to market to clients. But in my mind, neither are Mortgage 2.0. I had my own idea, (Part 1 & Part 2) for a 2.0 community, but it would suffer from the same issue that limits Smart Hippo. I’m not sure web 2.0 is appropriate for our industry.
This might come off as mortgage geek rambling, but I’d be interested as to what other’s think. What’s a good example of a Mortgage 2.0 company? How would you do it?
There are several interesting Web 2.0 things going on in the larger personal finance space, ventures like Mint, or the many participants in the Finovate 2007 conference
(http://www.finovate.com/presenters.html). A lot of interesting stuff going on with Chris Larson’s Prosper, and Mortgage category was represented by MortgageBot’s MortgageMarvel.com product at this conference. I believe Smart Hippo is presenting at the upcoming Finovate 2008 conference. Lots of room for innovation here, and I agree with your key point – their is no mortgage consumer community — unless you want to include the foreclosure prevention and modification communities sprouting up on sites like http://loansafe.org/. Nevertheless, people continue to use the internet more and more to research their purchase or refinance mortgage and I think there are many paths towards improving this. Times are right for creativity and innovation.
The last conversation I had with Brian Brady left me with a very good Mortgage 2.0+ platform if I can figure out how to make it work properly, a task my own geekness fails to comprehend. However, if I can get it together, I think it will revolutionize the Mortgage 2.0 or beyond platforms.
You are correct that borrowers represent a weak community with respect to mortgages – they are indeed “transient”, but perhaps the lens is a bit too tightly focused.
The act of buying a mortgage is for most people an infrequent occurrence and I think that is key to understanding how to capitalize on this community. This is not the best of analogies, but bear with me. If I were to market to “people who have traveled to the moon”, I’d be hard-pressed for community content. Broaden my scope a bit to “people who have traveled extremely long distances” and I’m hitting a much larger audience – not so tightly targeted, but the commonalities are important. The idea is to be prepared for when the opportunity presents itself, or even to create the opportunity, by participating in this slightly more nebulous community.
And therein lies the other problem – can a community like this work without active (and trustworthy) participation from the lenders? Transparency is indeed the only way to make this work – but it’s not transparent if you can only see what you and the others on your side of the glass are doing…
Intetesting blog! Wish I found it before…
I think there are ways to make a mortgage site a community site too. Why not involve both sides to participate? Provide long term incentives (level of trusts, groups activities, incentives for older & more engaged members, etc) enabling a stronger involment is quite easy.
And beside there are not only mortgages in life!
Transparancy is key and it needs to be shared by both sides. It’s possible.
Lori,
I think you got the idea.
Todd, if all there is on a blog are rates and loan info than you are right. People don’t need to talk to us or go to our blog or website. What incentive it there for someone to keep coming if they don’t need a loan right now.
I think that when you create a community and give useful information, Tips, Money saving Ideas, community news etc, people will come back.
I added a business directory on my site, for my clients who always call me for many services other than mortgages because they know I am well connected. Home owners always need something, and if we create a “hub” they will come to us in between mortgages and refer their friends and colleagues. I invite you to check the page at http://www.loans-4-u.com/BusinessDirectory click on the link to open the interactive directory. This service is provided to me by the coaching company I am part of http://www.buffiniandcompany.com
To your continued success
Racheli
http://www.YourMortgageCafe.com