Anyone watching the Superbowl on Sunday couldn’t miss the ad series for Quicken Mortgage’s “Rocket Mortgage.” If you bought into their pitch, you’d think that you’d download their app, hit a couple of buttons on your phone and get your mortgage in minutes—like magic.
The government agency charged with protecting consumers, aptly named the Consumer Financial Protection Bureau, took notice, sending out this tweet:
Setting aside the possibility of returning to the too-easy lending standards that led up to the meltdown of 2008, the real problem with this ad is how much it disregards the real process of getting a mortgage today.
It doesn’t mention that a borrower will still have to supply income and asset documentation. They’ll still have to get an appraisal—and they won’t be able to order the appraisal until they’ve received all the disclosures required by law.
The ads don’t say that an underwriter will have to paper trail any “large” deposits showing up in the applicant’s bank statement. “Large” could be as little as $500.
They don’t tell you that you’ll have to write letters of explanation for every derogatory entry, or every inconsistency in the past addresses listed on your credit report.
If you believed Quicken’s pitch, you’d think they were the only geniuses who figured out automated underwriting. The fact is that almost ALL loan originators use one of two automated underwriting systems (AUS): Desktop Underwriter (Fannie Mae) or Loan Prospector (Freddie Mac). Any loan originator can get your information, run your credit and give you a preliminary loan decision in minutes.
Oh, and one other thing? We small, local lenders actually return phone calls.