Can the New Rocket Loan Take Over the Industry?

01/14/2016
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Over here at the NREP, we’ve been saying for years that once a lender figures out how to completely process and approve a loan without any loan officer participation, there will be little need for loan officers from that point on.  That day is coming.  It might not happen in the next 5 or 10 years, but it is coming.  Quicken Loans new Rocket Loan product is giving us a glimpse into that possibility.

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Comments
  • I wonder what the CFPB will have to say about this. If they bless this type of transaction, well then I guess lenders will no longer be responsible to have a meaningful conversation with their clients. I guess that getting a mortgage and buying a home really is no big deal anymore. Hell, why not just throw out all of the regulations also.

    Mark January 14, 2016 5:13 am Reply
    • First thing I thought of was the CFPB…and their current relationship with Quicken. Be interesting to see when and how they react to this process. I can’t help but believe there will be glitches that will cause compliance issues. My guess is CFPB steps in when the volume is sufficient to maximize the amount of the fine.

      Long Time Listener - First Time Caller January 14, 2016 6:37 am Reply
  • If the smart listing agents and smart buyers agents rejects Quicken’s rocket pre-approvals for obvious reasons (zero communication, blown closings, etc…) then the only business that is left for Quicken rocket mortgage are refis. Furthermore, if you are a listing agent and you accept an offer that has a pre-approval from said program you are not working in the best interest of your client because there is no accountability from the mortgage machine that issued the pre-approval.

    Adam Miller January 14, 2016 6:18 am Reply
  • To a great degree Quicken already does this. That’s why I get pissed off, excuse my language, borrowers in my office when their loan blows up or they have to pay higher fees and nearly always higher rates. I love technology. But the quality of the person reviewing your potential loan and helping you choose your best option base on your INDIVIDUAL situation, not just today, but down the road, is invaluable. Will this work? Of course it will. Will it take the place of seasoned professionals? NO

    Michele January 14, 2016 6:28 am Reply
  • What part of this don’t realtors and lenders understand? We used to only be able to book travel through a travel agent, now most people “do it themselves” via dozens and dozens of travel websites. Retirement planning and investing? This was only done through a licensed or registered stock broker, insurance agent or financial planner. Want a mortgage today? Shop on google! https://www.google.com/compare/mortgages Or get a Rocket Mortgage! As our hosts say in conclusion, this is inevitable! How are you going to compete? By offering knowledge and experience, professionalism and world class customer service! How can you do that? By sharing what you are working on “one bullet point at a time” on social media! Share your knowledge and experience (Educate don’t Sell) and you will become “top of mind” with your network!

    Chip Leakas January 14, 2016 7:02 am Reply
  • What this won’t do like my preferred lenders is talk to the buyers and get to know them. They won’t find out that Joe and Jane could pay a 20% down payment, but have a baby coming and are worried about draining their savings account. While my lender will talk to them in depth to understand their situation and give them different options for their home mortgage that they can then choose from to best fit their needs while still getting a great rate. These millennials who want answers now, but often times want to be able to text their questions won’t be able to text the Quicken Machine on a Saturday afternoon at 1pm with a question while they can text my lender and get a response in no more than an hour. I do believe that this will get some business, but Quicken can’t beat my preferred lenders who take an interest in my clients and are almost always available 24/7. I had two clients in 2015 who started off with Quicken. Once they saw how difficult it was to talk to a Quicken rep, I had not problems switching them over to one of my lenders which in turn made my clients love me even more. :)

    Tony January 14, 2016 7:28 am Reply
  • Why aren’t Quicken loan people “seasoned professionals”? Because they do everything over the phone? When was the last time a Lender attended a signing? Often my local Lenders send borrowers to their websites for their on-line applications. How is that any different? I’m a fan of Quicken and this new “Rocket Loans”, is brilliant.

    Debbie Realtor January 14, 2016 8:26 am Reply
    • You need to have a sit down with your lenders or have a better handle of where your clients go for their financing. Can’t blame the lender if you let an inexperienced client pick their own lender.

      HIPO T K January 15, 2016 8:36 am Reply
  • I had a job once where I was up for a promotion. I was young, 28, Master’s Degree. Didn’t get it. Went in to the boss looking for advice. He was a retired Army Colonel. He looked at me and said. ” Sal you know what your problem is? You think you are indispensable. Let me tell you how indispensable you are. Stick your hand in a bucket of water and the amount of impression you leave in that bucket is how indispensable you are” Never forgot those words. Nobody is indispensable. You bend or you break. You adapt or you lose. Its coming… Nothing you can do to stop it. Be a better agent and learn.

    salvatore ruta January 14, 2016 9:27 am Reply
  • Hi Guys – your right that there will be like 5% of people who will be able to do this. The majority of clients my friends who work at the big banks as well as mortgage brokers in California tell me that every single client with the exception of a very few have credit issues, income challenges, divorce issues, clouded title, foreclosures or short sales, tax issues and well you know all the rest. Computers are great but millenials with 1.3 Trillion dollars of debt are not buying homes any time soon with the economy and job procurement not really good at this time. I mean when you have 37.5% unemployment in our country (US Labor Board Participation rate) paying 1.3 Trillion dollars in student loans back will nto be an easy task.

    Bernie January 14, 2016 11:17 am Reply
  • Rocket Loan is not new. It is lipstick on what Quicken has had for years. The ten minute thing is new, but you know that will come with a ton of caveats. They are simply using an proprietary AUS with the data that the borrower entered. And as we all know that data is often wrong. So, yeah, they will get a qualified approval in ten minutes, but when it comes time to actually verify the data and approve the loan, things will get sticky. This looks more like lead generation for Millennials.

    marcus90210 January 14, 2016 1:30 pm Reply
  • On a small percentage of transactions (I’d guess 10%) the borrower needs meaningful advice. Those clients are generally self-employed or facing an unusual life event. Those folks need an experienced LO. But the vast majority, who simply want a fixed rate quote for their purchase or refinance – do not need an LO.

    Why do LO’s exist and make a lot of money per transaction? There is one big reason and one smaller reason. Big reason: customer acquisition. Plain and simple – you are paid to bring your firm the loan. Whether you are a genius about financing or a moron – if you can bring in borrowers – you provide value. That is 90% of the reason you earn what you earn. Lesser reason: you are a processor. You all know you spend a large amount of your time babysitting your loans to closing. You help call to get VOE’s. You contact title companies to clear title. You badger your underwriters.

    But what happens when a company like Quicken spends a bazillion dollars on marketing and pulls your borrower away from you? What happens when their Rocket automates much of the stuff you (and your processors) spend their days chasing?

    Answer – you will be forced to find something else to do for a living.

    I love reading these posts. Anyone who thinks, a decade from now, that most (but not all) LO’s won’t be replaced by systems like this – is ignorant of history. If you really and truly think the $1,000 to $3,000 per loan you make isn’t going to be squeezed out by technology and marketing – then you are foolish and misguided.

    In a few short years, the taxi cab industry has been decimated by Uber. AirBnB is doing the same to the lodging industry. Stock brokers used to think their fat salaries were guaranteed – until online trading destroyed them and made them obsolete. Librarians used to be a profession. Google put an end to that. One could go on and on. These guys are spot on. If you REALLY think your value is consultation and if you REALLY think clients will pay thousands of dollars for it – try putting out your shingle as a “mortgage consultant” who doesn’t get the borrower the loan – but rather provides sage advice. You’ll quickly find out that the borrower could care less about your advice. They want the money – not you. Once they can get the money without paying you – you’re toast.

    Carl January 23, 2016 1:39 pm Reply

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