Mortgage brokers, bankers and real-estate agents stained their reputations in the past few years by recommending mortgages that many now-broke homeowners couldn’t afford. Now Home-Account is unveiling a consumer service that recommends a mortgage solution that has the consumer’s interests at heart.
The company will talk on stage today at the DEMO 2009 conference in a [...]
The company will talk on stage today at the DEMO 2009 conference in a section dubbed “Stimulating the Economy.” As the name suggests, this company takes the credit crisis into account and offers advice to the consumers who have been hit hard. Since it refused to take any money from the $11 trillion mortgage industry, the San Francisco company contends it can offer unbiased advice that fits the homeowner’s needs. If this kind of Consumer Reports-style institution was around five years ago, we might not have had this mortgage mess.
The company grades and analyzes the homeowner and his or her mortgage, presents scenarios to improve the financial picture, and then pinpoints the best mortgage options that the consumer is qualified for. The consumer can then choose what works for them. The system is transparent.
This is probably the kind of service the government should subsidize to avoid future bankruptcies and bailouts. But there’s no reason why entrepreneurs shouldn’t try this as well. The company is giving away its Mortgage-Evaluator for free. But it will try to upsell the consumers to a $9.95 a month subscription fee for a personalized recommendation and ongoing advice.
The goal is to demystify the mortgage process, said Mark Goldstein, chief executive of Home-Account. The idea is good, but the business model needs further work, I think. It may be hard to convince consumers that they should keep the subscription for more than month. The logical course of action is to take the advice, get a loan, and be done with the service.
Goldstein is currently chairman of Loyalty Lab, a marketing system provider for banks and brands, and he is former CEO of Bluelight.com, which Sears acquired. The team also includes five former executives from Washington Mutual, now a part of JP Morgan Chase.
The company was founded in 2008 and has ten employees. It is backed by Charles River Ventures and several prominent Silicon Valley angel investors. Competitors include retail bankers and web sites such as Quicken Loans, Zillow.com, and LowerMyBills.
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