Definition of "Mortgage Auction Site"
Same as term Lead Generation Site: A mortgage Web site designed to provide leads to lenders. A 'lead' is a packet of information about a consumer in the market for a loan. Lenders pay for leads, and these sites are an important source of them. Prospective borrowers fill out a questionnaire covering the loan request, property, personal finances, and contact information. The sites use this information to select the lenders to whom the information is sent. Lenders then prepare offers to the borrower based on the same information. Lender Screening: Lender selection by lead generation sites should be valuable to borrowers with one or more challenging features, such as poor credit, incomplete documentation, or little cash. Such borrowers can avoid wasting time soliciting lenders who won't deal with them. Lender screening also provides some protection against falling into the hands of rogues lenders or mortgage brokers out to extract as much revenue as possible from every customer. The sites have every reason to bounce a lender who attracts multiple complaints from borrowers. Promoting Lender Competition: Lead-generation sites are sometimes called 'auction sites' because they purport to provide a group of lenders, usually up to four, who will bid for the borrower's business. Selecting from among lenders provided by an auction site, however, is as difficult for most borrowers as selecting among any other group of lenders. The sites don't require that the initial price quotes provided by their lenders be sufficiently complete to allow borrowers to make intelligent choices. It is no easier to get settlement cost data, or the
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