Opinion

Quicken Renews Debate Over How Fast Is Too Fast to Get a Mortgage

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By the looks of their rapid-fire responses on social media, the folks at Quicken Loans knew they'd be courting controversy with their commercial promoting the Rocket Mortgage app during Super Bowl 50.

The 60-second spot, seen below, argues the well-documented principle that homeownership drives economic growth by promoting demand for household goods. It goes on to make the case that an easier mortgage process would create more homeowners and in turn, a more robust economy.

Social media quickly blew up with comments from people convinced Quicken's product will usher in a second housing crisis by lending to unqualified borrowers. And then the Consumer Financial Protection Bureau joined in.

The CFPB's tweet — which was posted shortly after the Rocket Mortgage commercial aired, but doesn't expressly refer to Quicken Loans or the Super Bowl — implicitly warns consumers to be wary of technology in the mortgage application process.

Given that the CFPB has been aggressively pushing a paperless agenda, the response highlights the cognitive dissonance in the messages it and other regulators send to the mortgage industry about how and when to use technology.

Nevertheless, the widespread backlash has reopened a familiar debate: how fast is too fast to obtain a mortgage?

For many football fans on social media during the game, it would seem "at the push of a button" is too fast.

The average consumer wasn't the only one to join the conversation: actor Steve Carrell, who stars in the recently-released film adaption of "The Big Short," tossed in his two cents

And across the internet, from MarketWatch, to more niche sites like Bustle, there was discussion of whether the idea of touching a screen to obtain a mortgage was really the best way to encourage homeownership.

But Rocket Mortgage doesn't underwrite mortgages at the tap of a button — one of its keystones is to act as an intermediary between financial institutions and the nonbank lender to collect the official documents needed to verify a borrower's income and qualifications, in the name of convenience and accuracy. Its draw is that it offers consumers a way to skip the verbal interaction with an associate over the phone and obtain their rate options in the palm of their hand.

Quicken Loans' replies to direct tweets and mentions about the commercial indicates that not only the mortgage industry, but consumers themselves, are not yet ready to have mortgages and technology mix.

While the general public's skepticism is understandable, the CFPB's reaction points to a much bigger problem: does the bureau even know what it wants from the mortgage industry?

The CFPB's message seems to be clear: paperless is the way of the future. Make it easier and more convenient for people to wade through the mortgage application process. And do these things while adhering to regulations and upholding accuracy.

Except its actions at every turn say, "No, don't."

If technologies like Rocket Mortgage work as they are supposed to, and official paystubs and tax information is obtained straight from the source — banks, state and federal government agencies — without the potential to be doctored by a middleman, then the CFPB should be championing their use, not stoking fear in a consumer base that still, largely, doesn't trust banks and lending institutions.

As hard as Quicken tries to pull the mortgage industry into the convenience and accuracy that technology can offer, mixed messages from regulators hamper those efforts. The average consumer doesn't understand the breadth of the mortgage application process, and the CFPB's "Know Before You Owe" campaign doesn't seem to be helping to educate them, judging by this level of backlash.

Additionally, lukewarm support from a regulator leading by enforcement is arguably one reason (the other being investment) that lenders are shy to develop and implement their own tech strategies to provide Quicken with serious competition.

However, blame for the backlash doesn't lie solely on the regulator's shoulders. The commercial itself didn't do Quicken any favors. Its message — that buying a home will buoy demand for things like custom-made furniture and blenders, thereby leading to a booming American economy — is a good one. But Quicken buries the lead, and watchers were still thinking "the process of buying a home SHOULD be intimidating," instead of following Quicken's train of thought and focusing on how they could do their part to keep the economy bustling.

Unless the whole point was to get people talking — the Internet loves nothing more than immediate outrage — in which case, Quicken exceeded in its objective. By using social media to interact directly with consumers, Quicken provided an opportunity to engage with people who are either uninformed about the mortgage process or haven't even given any thought to the idea of buying a home, and answer their questions in real time.

Whether consumers believe those answers and will adopt technology when the time comes for them to buy homes remains to be seen. With the CFPB waffling on the use of technology, though, there's no excuse for them to try.

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