|E-LOAN TV Ad Blasts Brokers
Brokers counter with personal touch
September 23, 2003
By PATRICK CROWLEY
|Some mortgage brokers are crying foul over their industry’s depiction in a television commercial being run by Internet lender E-LOAN.The ad has been shown on cable networks that include MSNBC and Bloomberg Television. In it, a couple seeking a mortgage loan is questioned by a woman who asked if a broker is “getting the best deal for you and not for himself?”
The spot has touched a nerve in the mortgage brokerage industry.
“E-LOAN is trying to have a gimmick or hook to get people to apply with them for a mortgage,” Kate Crawford, president of the North Carolina Association of Mortgage Professionals, said in an email response to questions posed about the commercial by MortgageDaily.com.
Crawford has seen the ad and believes the public won’t fall for E-LOAN’s claims.
“The consumer is not stupid,” she said. “They know when they are getting a good deal. Just because a mortgage is offered online does not mean it is cheap.”
E-LOAN’s public relations did not respond to email requests for interviews. The company says on its web site that it combines “the best elements of brokering and lending to provide you with optimum home loan choices.”
But several mortgage and real estate professionals contacted for this article said cyberlenders will never be able to offer the personal touch or service of a mortgage broker.
“A personal relationship is much better than an online relationship,” Carl Dixon, past president of the Georgia Association of Mortgage Brokers, said in an email. “My customers come back to me because of the service that I provide.
“I have seen the ad that E-LOAN runs bashing the mortgage broker,” Dixon said. “The consumer does not realize that Internet mortgage companies are only looking for loans. The mortgage broker is working for the borrower to find the best loan available that will suit the particular needs and circumstance.”
Dan Diaddigo, vice president of Jarvis Street Mortgage and Investment Co., in Dawsonville, Ga., said the question posed by the ad — is the consumer getting a good deal — “is fair to ask since, in most instances, mortgage brokers do not have a fiduciary responsibility to the consumer.”
“However, disclosure requirements are such that a consumer is armed with the information necessary to make an informed decision,” Diaddigo said in an email. “The strength of mortgage brokers is, and always has been, their ability to bring the market and personal service to the consumer. Here, the Internet brokers struggle to compete.
“They bring the market, but not necessarily the personal service,” he said. “The financing of a home is, for most people, the single largest financial transaction they will ever participate in … and most people do not want to be treated like a commodity.”
Crawford, the North Carolina association’s president, was somewhat philosophical in her overview of the ad and the increased competition brokers face from a growing cadre of online lenders that also includes DiTech Direct, E*Trade, and even Charles Schwab.
“They are trying to compete,” she said. “The more competition, the better for the consumer and for the mortgage brokers. Because we know the online companies want our business.”
Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: firstname.lastname@example.org
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