Beware- Zillow's New Mortgage Pre-Approval Tool
Borrowers getting a loan to buy Boise Idaho real estate need to beware. If your Identity is stolen you will have to endure a lot of repair work to get back into a position to get a new mortgage for Boise Idaho real estate.
Zillow just launched its new Mortgage Pre-Approval Tool which according to Zillow "allows home shoppers to get pre-approved for a mortgage quickly and easily". Sounds good right? Well like most anything else, a consumer, in this case Borrowers need to dig a little deeper. What Zillow appears to be offering is a central location to collect the initial information for a Borrower to be Pre-Approved for a mortgage. Zillow will then pass their information to affiliated Lenders who will Pre-Approve the Borrower.
According to Paul Hagey of Iman News:
"The tool, available on both Web and mobile, prompts homebuyers to complete a short questionnaire about their income, credit score and monthly debt that gives them an estimated preapproval loan amount.
If they’re interested in continuing the process after seeing that estimate, users enter in their name, email address and phone number, which makes their loan inquiry immediately available to lenders in the Zillow Mortgage Marketplace. Lenders can then pull potential borrowers’ credit scores and, if they meet the lenders’ standards, send them a preapproval letter that they can print or email."
What is NOT known is how many affiliated Lenders Zillow is going to pass the Borrowers PERSONAL information to. Will two, three, or twenty Lenders be viewing the Borrowers PERSONAL information and pulling their credit? Even though the Borrower will only be hit for one credit pull if all the Lenders pull their credit within 14 days of each other, do they really want their PERSONAL information floating around in that many hands, by that many people they do not know? In these days of identity theft this is a very risking position to put themselves in.
Furthermore, how familiar are these Lenders with programs specific to each state, like Subsidized State Bonded Programs for First Time Buyers. Also there is a WHOLE lot more to Pre-Approving a Borrower than just pulling their credit and having them state their income.
This seems to me like a receipt for major problems. Borrowers could be opening themselves up to Predatory Lenders, putting themselves at risk of identity theft, and receiving Pre-Approval Letters not worth the paper they are printed on
Zillow seems to be trying to test dangerous waters, which resemble the practices that played a role in getting us into the mess of the last decade. Borrowers Need To Beware Of Zillow's New Mortgage Pre-Approval Tool, and the risks they are opening themselves up to.