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OfferAngel.com Helps Borrowers Level The Playing Field With Lenders
By James Comtois
SCOTTSDALE, AZ-The mortgage loan is an inherently complex transaction. Few borrowers fully understand their residential transaction or the disclosures.
In order to help borrowers level the playing field with lenders, a new website and consumer service is working on helping borrowers get information about their mortgage terms, protecting them from choosing unsuitable mortgage loans and preventing them from falling prey to predatory lending practices.
The website, http://www.offerangel.com, is a free open-access site with a service accessible both to borrowers and loan originators.
According to OfferAngel.com, which was officially launched this May, many of the current high foreclosures and instances predatory lending was a result of borrowers not understanding the complexities of a mortgage loan. The Center for Responsible Lending estimates that U.S. borrowers lose at least $9.1 billion annually to predatory lending practices.
Industry insiders acknowledge that borrowers might not understand the terms of their potential loans. "One of the challenges of creating effective disclosures is presenting information so that it is as accessible and understandable as possible," said Federal Reserve Board chairman Ben S. Bernanke.
With OfferAngel.com's online system, mortgage lenders are required to use an online mortgage offer form detailing the terms of their mortgage loans that may not be found in federal disclosures. This information is used to create a free side-by-side mortgage report for the borrower. This report provides an unbiased comparison of the mortgage loans and their terms, so borrowers have a clear understanding of the various offers and are not lured into unsuitable mortgage loans.
By simplifying the information the borrower receives from lenders, the borrower is less likely to choose a loan solely on interest rate.
Over the last few years, many borrowers took adjustable rate mortgage with the lowest rate without understanding the risks. The OfferAngel.com Mortgage Report makes it easy for the borrower to see the big picture so they do not get stuck in a loan with terms that may cause them financial difficulties down the road.
OfferAngel.com makes complex mortgage terms that are not found in federal disclosures easy to understand. In addition to simplifying the terms, the borrower can have an OfferAngel.com analyst review the offers selected by the borrower to create a personalized mortgage report. This report not only alerts the borrower to potentially unsuitable mortgage terms but also helps educate the borrower on why the various mortgage offers may differ from each other.
The OfferAngel.com analyst can review up to four offers and comments on more than 100 different loan terms making sure they are compatible with the goals of the borrower and in line with market conditions. The personalized mortgage report can be purchased for $24.95.
The initial concept for OfferAngel.com came about when co-founder Meg Burns, a former mortgage professional, recognized that borrowers who shopped around to find the best mortgage loan were often falling prey to deceptive sales tactics.
"It was frustrating to see hardworking people duped into unsuitable mortgages because a loan officer wanted to make a big commission," said Ms. Burns. "Most borrowers are not comparing apples-to-apples when shopping with several lenders because they do not know what questions to ask and get overwhelmed with the complexities of the industry, leaving them at a disadvantage with the lender. We knew that if we wanted to drive industry change, it would require a large scale solution."
In finding the solution for the current mortgage meltdown, OfferAngel.com wanted to resolve the lack of consumer knowledge, high-pressure sales tactics and inadequate federal disclosures in order to present a market solution.
"We came to the conclusion that if we built an online service that addressed all of these problems, we could turn the balance in favor of the borrower," said co-founder Jason Kaufman.
Borrowers who get their mortgage offers through OfferAngel.com get the details needed to make an informed decision without any high-pressure sales tactics. Additionally, a loan officer cannot easily manipulate the site.
Unlike the federal disclosures or a sales pitch, OfferAngel.com is able to use feedback from customers to prevent deceptive loan officers from submitting mortgage offers through their system.
"Being online, we can use technology and customer feedback to prevent deceptive lenders from interacting with borrowers. Loan officers are less likely to use bait-and-switch tactics with a borrower on our site because we will ban them to protect future borrowers," said Ms. Burns.
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