“Your loan request has been approved.
Thank you for your loan request, which we received yesterday, your refinance application has been accepted. Bad credit OK, we are ready to give you $320,000 loan, after further review, our lenders have established the lowest monthly payments. Approval process will take only 1 minute. Please visit the confirmation link below and fill-out our short 30 second secure web-form.
Ok, I take it back, so you may not be an idiot to have clicked the link in the email, maybe you’re just curious . . . like me. So, for the sake of my clients and blog readers (and curiosity), I went to a completely different computer in my house and typed in the link from one of my many “Accepting your application” emails. Expecting the worse — assuming that my computer would immediately lock-up and blue-screen while a villainous laugh bellowed through the speakers — holding my breath as I cautiously hit the enter key, I was relieved that the link led to what appeared to be a mortgage company’s website.
I am sure that you have probably received an email with similar information — junk-mail by email, or spam email, sent out from some person or computer hoping to drive clicks and traffic to their website.
From this apparent mortgage-company website, and many others like it, you can fill out a request for financing. So what happens once you hit submit? Well, that depends. For a large number of sites, once the form is completed and the information sent, you are not a potential client, you are a sell-able lead. Your lead information can be sold to one (or multiple) mortgage companies. In most cases, the company with the website does not even offer or have the capacity to offer mortgage financing.
This is the same original model (although much more dressed up) for LendingTree. You fill out an online form for a request for financing, and you get multiple offers from different lenders. LendingTree would (and I assume still does) charge lenders a hefty-fee to be part of their referral network. And in the majority of cases (as far as I can tell from reading their website), they do not offer any kind of financing. From their website, “LendingTree, LLC does not make loans or credit decisions in connection with loans, nor does LendingTree, LLC issue commitments or lock-in agreements.” (To their credit, they do mention information about sometimes placing loans with an in-house wholly-owned subsidiary, licensed mortgage lender/broker – LendingTree Loans.)
So . . . assuming that you do not have millions of dollars in marketing money, but you want to establish a similar business model . . . what do you do? You want people to fill out “requests for financing” so that you can sell that information and create a referral network, what do you do? I guess you send out millions of emails telling people that their loans have been approved, that their refinance application has been accepted and that you are ready to give them $348,000 after a 1 minute conversation — hoping that a few click-happy consumers will fill something out (why someone would give intimately personal financial information through a junk-mail click is befuddling to me but I will resist the urge to go down that path), and then you sell that lead to a mortgage company for $9. Well, if you were unscrupulous enough to send out millions of mortgage junk-mail, you’d probably sell the information to 10 or 20 mortgage companies and make $180.
So, the moral of the story . . .
One, if you do click the links you find in mortgage junk email, never give out personal financial information. Personal financial information should never be given online without first checking where that information is going to be sent (and to whom it will be sold).
Two, if you do click (which I did), try filing out the opt-out request (I mean, they already have your email address, right?). To that point, I am shocked — I nervously filled out the opt-out request on the mortgage-lead generating site that I went to yesterday, and to my surprise, this morning I have NO offers or congratulatory emails! We’ll see if it holds up . . . maybe the spammers are off today for the holidays.
Three, if you are lacking in your financing options, and you want personal, professional mortgage advice, ask your Realtor for a recommendation, call a friend or a co-worker for a recommendation, or ask your financial planner or insurance agent who they have used or recommend. On the other hand, if you want to be bombarded with lots mortgage information and with phone calls and emails from people you don’t know, go to any one of the many mortgage-lead-generating websites fill out your information and hold on tight. And in the words of a client of mine, who had already gone through the pre-qualification process with me and simply wanted to do some “checking-around” in her shopping for a mortgage to make sure that she was getting a great deal, you might also be saying . . . “Jeffrey, I accidentally called LendingTree.”