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Online mortgage auction aims to cut mortgage costs
Jan 23, 2006 - Linknet Finance News

Online mortgage auction aims to cut mortgage costs

Online mortgage auction aims to cut mortgage costs

January 23, 2006 - Linknet Finance News

An new U.K. online mortgage bidding service was launched this week at MortgageBundles.com. The service goes beyond the typical mortgage directory website which just offers contact and product information for lenders. This site claims to get a number of different companies to actually bid against each other for U.K. mortgage business.

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Florida Mortgage Guide
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They do this by "bundling" together groups of similar borrowers and then auctioning the business of the entire bundle to lenders. They claim the system will give consumers bulk-buying power, and the lenders will also be able to cut their sales costs because of the streamlined bidding process.

The desired result is lower mortgage rates for home buyers, similar to the way online flight and travel booking websites have lowered prices for those services. Until now, the web has largely failed to generate savings for individual home buyers.

To get in on the action, potential borrowers fill out an online form in which they answer nine questions about their mortgage requirements, the specifics of the home they are buying, and personal credit history.

Then mortgagebundles.com puts borrowers into "bundles" which are then auctioned online among lenders. Within approximately two days, buyers who have filled out the form are told which lender is offering the best deal, along with the full terms of the deal.

Participants can go ahead and actually apply, or simply walk away from the offer. By the terms of the agreement, the lender has to honor the offer, no matter how many within the bundle actually proceed.

So far, 14 lenders representing about 50% of the mortgage market have signed on to be regular participants in the online auctions.

Commercial Real Estate Loans
Kitchener-Waterloo Real Estate

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