The writing was on the wall in October, when the industry gathered in Chicago for the Mortgage Bankers Association’s annual convention.
In the exhibition hall of 200 or so companies, one booth sat conspicuously empty among the vast wonderland of vendor swag, product demos and business card fish bowls—perhaps sticking out even more because it was directly across from LOS vendor Ellie Mae’s three-stall-wide outpost.
The space was reserved by Google to promote Google Advisor Mortgage, a lead generation product where lenders pay to advertise their latest rate quotes and connect with prospective borrowers. Whether MBA officials knew that Google wasn’t going to show up is anyone’s best guess, but if they did, it wasn’t in time to change the giant posters, program guides and expo maps that are printed well in advance of the event.
We now know why Google wasn’t at the MBA annual. There’s no reason to promote a product that’s on the chopping block.
Google said the platform shut down due to poor performance. Lenders and product and pricing engine vendors who have worked on the platform, as well as officials at competing rate search platforms, have speculated that given the sophisticated nature of the mortgage business, the return on investment didn’t justify the effort of maintaining the rate search product relative to the bank account and credit card search products on Google Advisor—though it should be noted that according to one lender, the mortgage search was the only revenue generating feature of Google Advisor.
One industry expert suggested that Google may replace the search platform with a competing lending operation—a move that’s technically feasible, but highly unlikely. Maybe the industry is just too tainted right now for Google to feel comfortable being actively involved in home finance—though that won’t likely stop it from taking lenders’ money for traditional keyword search ads.
Here’s another theory—Google couldn’t figure out the collaborative nature of the mortgage industry and its technology sector.
That Google didn’t notify its paying advertisers and the PPE vendors who helped keep rate quotes current that it was first scaling back and later, shutting down the platform—leaving them to make the discovery on their own—has participants baffled, not to mention frustrated.
The veil of secrecy—including a stranglehold on how and what lenders and vendors can say about Google—and the general attitude that “Google knows best” when it came to the platform is indicative of a bigger problem when large technology companies try to make a big splash in the mortgage space.
It’s a lesson that Microsoft learned a decade ago.
When Microsoft, Freddie Mac, Bank of America, Chase, GMAC and Wells Fargo unit Norwest Mortgage announced the creation of HomeAdvisor Technologies in March 2000, the partnership was heralded as a revolution for the way consumers would shop for and purchase homes and mortgages. But the venture never fully got off the ground.
An early sign that Microsoft’s plans were coming unraveled came six months in, when B of A and Wells Fargo decided to pull out of the initiative. In addition, many small lenders were critical of the arrangement, Freddie Mac’s role in particular.
By February 2001,
Critics at the time pointed to Microsoft’s heavy-handed approach and the lack of influence that the mortgage industry players had in the direction of HomeAdvisor Technologies as the reasons the partnership didn’t work, according to an article published in an industry trade journal shortly after the program ended.
While Advisor Mortgage outlasted HomeAdvisor by about a year, the same criticism could be said now about Google.
Even as it leaves the mortgage industry, Google has yet to loosen its grip. Lenders and vendors won’t comment about the platform, claiming Google’s strong-armed them into keeping quiet. The few brave executives who spoke to MT on condition of anonymity did so knowing they risked a serious dressing-down if their names ever got out.
Many small to midsize lenders rejoiced at HomeAdvisor’s demise, but the end of Google Advisor Mortgage is far less gratifying.
The platform Google built was easy to use and consumer friendly. It put an emphasis on borrower privacy, forcing lenders to wait until rate shoppers invited lenders to contact them. While that reduced the number of leads lenders received, it also significantly improved lead quality.
Unfortunately, the end of Advisor Mortgage is a missed opportunity for lenders, consumers and Google, but it doesn’t mark the end of online rate search. Companies like BankRate, Equifax, LendingTree and Zillow will continue to offer technology to connect lenders and consumers.
It’s unlikely that any lender that was advertising on Advisor Mortgage will face any long-term negative effects. Any company in the unlikely position of putting all its lead gen eggs in the Google basket can easily switch to another rate search platform.
It is possible that lenders may see Google’s departure as a reason to stay away from the online lead generation channel; though those lenders need only look at the ever-increasing impact of Internet shopping to dispel that notion.
But that’s not the point.
A lot of work—not to mention a federal lawsuit that LendingTree filed against PPE vendor Mortech—went into Advisor Mortgage. Mortech and other PPE vendors participated with little to no financial incentive, dedicating their resources to the initiative to provide new opportunities for their lenders and to have a shot at working with an Internet giant.
Now, all the effort seems wasted, or at least unappreciated, by a disinterested behemoth. The lenders and vendors who participated in Advisor Mortgage deserved more than to be cast off with such flippant disregard.
