Home-Account, a recently launched mortgage search and counseling service, has secured $1 million in seed and angel funding. The largest investor is Charles River Ventures, which gave the startup $300,000 through its QuickStart Seed Funding Program (the program usually only gives startups $250,000 but saw promise in Home-Account). Additional investors include many well-known Silicon Valley entrepreneurs and investors: Marc Benioff, Ron Conway, Mark Pincus, Jeff Clavier, Arjun Gupta, and Gigi Brisson.
Home-Account offers a compelling service for those who are looking for mortgage or to re-finance. In the current economy where credit is difficult to access, Home-Account helps consumers find the right mortgage for their needs and credit histories. Here’s how it works. Consumers fill out a free online mortgage profile to determine if their credit history qualifies them for a mortgage and what interest rates they could qualify for. Once Home-Account determines that a consumer qualifies for a mortgage, the startup will get mortgage offers from its partner lenders (this service costs users $10 per month).
With credit standards tightening for mortgages, many consumers may not qualify for a mortgage in the current climate. Home-Account offers a second service (also $10 per month) which will help consumers with poor credit history improve their credit scores and get their financial history in order to become more desirable applicants for mortgage lenders.
CEO Mark Goldstein says that he wants Home-Account to be the Kayak.com of mortgages. He says that Home-Account creates a better, more transparent way to get a mortgage. A good mortgage broker should do a lot of hand holding, says Goldstein, and recently, mortgage brokers haven’t been doing their jobs correctly. Home-Account doesn’t make commissions from the buyers or the lenders, like some online mortgage services like LendingTree.com and LowerMyBills.com. It makes money solely from the consumer subscriptions.
Goldstein formerly co-founded BlueLight.com, which was Kmart’s foray into e-commerce during the first dotcom bubble. The Home-Account team is partly made up of mortgage technology experts from Washington Mutual. Since the startup’s launch, 25,000 consumers have used the mortgage evaluator and several hundred have signed up for the paid mortgage finder service. For a subscription service, however, there is sure to be a lot of turnover. Once a consumer finds a mortgage, they won’t need the service anymore. Only people with the worst credit will have any incentive to keep their subscriptions going, and Home-Account will have the perverse economic incentive of keeping their hope alive as long as possible.
i need a mortgage–great!!!!
I give this business about 6 months before they issue a “restructuring” notice and convert into LendingTree. The economics are WAY better.
lendingtree is now tree.com and is basically a bankrupt company, not sure that’s the business model that’s going to work!!!
Damn. And I still can’t get any funding for http://f2bbs.com
-you’d better hedge your bets, this technology is not lead-gen like the lending tree types..its real time data that allows a subscriber to ‘execute’ without missing a market window.
Hope they allocate a good amount here to change their name. They are bound to lose much traffic to HomeAccount.com.
Cheers
Sahar Sarid
Bido.com – Social Auction
I agree, Sahar. TERRIBLE domain name. You telling that a company that is going to put this much into building an online business can’t afford a real/solid domain name?? If I were investing I’d demand a better brand/domain from them. While most traffic won’t be typed in, it’s still just poor decision to go the hyphen route. Come on guys….
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i disagree…the beauty of this concept is it’s an actual ‘account’, much like you have an account for your 401 and perhaps even health care.
What’s needed to solve this financial crisis is clarity–home-account tells the homeowner exactly what it is…it refreshing relative to many of the start-up names that you say wtf.
you are right. especially considering that after compensation lawyers and drugs, this is by far the most competitive market on the web.
there are just far too many sites out there throwing around far too much money for a site to make it with a user-pays model.
-each mortgage closing is probably 4-5K in fees. With the homeowner paying only $10/mth and now transacting every 2-3 years, its a nice value play.
Plus, I like there statement–the consumer pays. In the age of bailouts (someone else pays) and old mortgage industry (kickback from higher in the value chain), not only will consumer see and like, but so will the taxpaper.
You should also check out Quizzle.com from Quicken Loans. They give free credit reports with a social security number or a credit card. Really neat.
I think Dave meant that Quizzle.com gives you a free Experian credit report (every six months) *without* a SS# or credit card.
Incidentally, Quizzle also gives you free mortgage recommendations based on your personal situation and will manage your mortgage for you by constantly monitor the rate environment to let you know if a mortgage ever becomes available that will better your situation. All of this… for FREE (no subscriptions, no b.s. “trials,” no catches, no spam).
and Quizzle (Quicken Loans) tacks on heavy fees and points….pay attention to the fine print here…Quizzle is a markting frontend to a lender selling high priced mortgage product.
this is correct—quizzle is simply a marketing tool for quicken loans.
quicken has the standard fees (sometimes higher) and interest of old mortgage industry–long term debt.
Hmmm
This is just more proof that investors are blind. This is a horrible business model and one sure to be restructured. I guess the investor world truly is a good ole boy network – investing in who they know instead of an actual viable business model.
Why are you charging people that are in debt? Why would 100s of sign-ups equate to 1mil in funding? Why would anyone pay $10 a month when they get little or no value, just a bunch of charts?
hey fail…. do you own a home? ever get a mortgage before? i guess not. it this company can save someone $150 a month like they say—people are going to swarm to it. millions of people refi each year—this is a killer idea—a bunch of charts? yo dude—you dont get it.
Actually the person has some point. You can’t deny that there’s a good ole boy network. The odds you getting the funding vs Mark is much lower. Unless your Mark himself.
The deal is a head scratcher for me. But I don’t know about the mortgage business. So?
-how about complete knowledge of their actually mortgage decision 24/7?
and..how about recommendations that are based on metrics not human basis?
and…how about the subscriber always knowing..without having to know…it software so its automatic.
Mark is one of the smartest entrepreneur’s ever!
Whats the kmart connection?
Not sure if Mark is one of the smartest investors ever but he does know how to secure funding. At last count he had to companies bought for better than 7+ figures and two flameouts. Can you do better?
Well I have to say it sounds pretty smart. At least they are not another ‘real estate and loan portal that plans to make money from advertising only to advertise on other real estate portals until they are broke’ and that is always a (+) in my Book.
Good luck!
I just signed up for this service, and it’s VERY alpha. Nothing works. Very, very disappointing. Can’t figure out how you actually do anything, and they ask for EXTREMELY personal information. I guess my favorite part is that you can’t even cancel your account – you have to email them and cross your fingers that they’ll remove you.
Hi Doug
I work at Home-Account. The service is beta and its free but the Mortgage Evaluation system is prime time and works great—did you go thru that? Regarding the Home-Account portion, its going live this week—last minute Experian asked for PCI security compliance and that set us back a few weeks—but its done and we have 100s of mortgages that kick ass on just about anything you could find across the web. Try us next week.
Hi Daniel -
Thanks for getting back. I found that there’s nothing to that service – literally, there’s nothing I can do on the service except see tips on improving my credit. Plus, it’s not really free – you have to put your credit card in and you get charged unless you turn it off within 90 days…which, of course, you can’t do without emailing you guys. Obviously, I’m interested in your product, and I went through reg, but come on, I’d expect more before you’d hang a shingle.
I like the color scheme on the website. Very cool. Just don’t see how this is a scalable, better yet, a sustainable revenue model.
Why would someone pay $10/month to shop for mortgages when you can do that on SmartHippo or Zillow for free?
Hi Seth
Daniel from Home-Account here. 90% of Americans won’t qualify for the ‘low-rate’ mortgages you read about and might be listed on Zillow and SmartHippo…but more importantly we dont ‘push’ you to lenders we ‘pull’ the top 3 lender loans to you–all ones we have qualified for you for in advance—and our loans are low or no point, low or no fee and no commission—our model simplifies the process and saves you money. Then, Home-Account tellsyou the second its time to refi and insures you don’t miss one month of savings! I admit we don’t have the marketing 100% yet but our aim is to be the Consumer Reports of mortgages and not resort to lead-gen.
Daniel,
I’m the cofounder of SmartHippo. I think you’re confused about how SmartHippo works.
SmartHippo is the first open, transparent marketplace for mortgages where consumers can use the power of the community to find the best rates and save money.
We use criteria such as credit score, location and loan to value ratio to only show rates the consumer qualifies for. We let any lender feed us rates for free and those with the best rates and best consumer feedback float to the top.
We don’t “push” lenders onto anyone. We let consumers make their own decision, and we never ask them for any identifiable information, much less charge them a fee, to do it.
Good luck with the business.
Hi. We are fans of the Smart Hippo concept at Home-Account and we wish you the best. We are targeting different consumers that seek directed advice based on their specific financial condition and might be loath to get advice from those they don’t know.
Daniel –
Hi, it’s David from Zillow. Sorry to have to say so but you no clue what you’re talking about here.
Loan quotes on Zillow are 100% customized to the borrower’s scenario. That means that borrowers do qualify for the low quotes you receive on Zillow … and it’s free … and there’s no limit to the quotes you get or lenders that quote you. Check it out (go to Zillow and click the mortgage tab.)
Good luck with your business. In future, please do your research before flinging FUD at us.
Seth –
You’re right. You’d be wasting your money and you’d probably not get the best loan for you. A website or algorithm is never going to pick exactly the best loan for you (just like the Zestimate will never be the exact price your home sells for.)
So you want to go where you find the greatest selection of loan quotes from trusted lenders to choose both the best lender and loan for you. I may be biased but I’d be surprised if you find a better solution for that than Zillow Mortgage Marketplace.
Correction “… you *have* no clue *about* …”
You get the idea.
David
Glad its working out for you guys. Our recent experience at Zillow Marketplace was, em, a bit different. Wish you the best!!! Daniel
-been on zillow and completely disagree.
zillow relies on self-ratings, then matches that data with lender fed rates/programs.
those in the mortgage game know a few hings 1) the consumer has only limited knowledge of his actual mortgage decision 2) has no idea of the decision cells and the nuances of Fannie/FHA and Jumbo and the biggie 3) the mortgage decision changes monthly!
Zillow is another version of old industry.
Home-Account is actual data with one eye always on the next transaction. It makes you future ready.
Normally, I’d be like whaaa??? another mortgage company. But with Mark Goldstein at the helm, it’s time to WATCH OUT. This one is going to be a winner! Charging users a subscription is highly disruptive to the current commission model since it puts Home-Account on the buyers side. If you don’t do it this way, you can never trust that the results your getting from those other sites have your best interest in mind. Go Mark Go.
This is a great business model and could be very disruptive. Searching for mortgages is tedious and nobody likes doing it. Home- Account actually helps solve a real problem.
Let´s see if they can pull it off…
Sounds promising. Though among the many many mortgage companies that have already established (or maybe possibly destroyed?) their presence online, I’m interested in seeing how this one fares… Especially now that the housing sector is really down due to the recession.
I visited the site and like the potential. I do however agree with Sahar and think they made the wrong decision to move forward with the domain they have. A primetime company should not have a dash in the domain IMO. I have loanlist.com
This is the most poorly written article I’ve ever read on this site. Did you just paste some garbage from an e-mail? Cripes.
as a lender – and active lead gen buyer for years – here is what I see –
1 – Fewer lenders
2 -Much tighter underwriting guidelines
3 – Much lower warehouse capacity for lenders to fund loans and tighter capital requirements on banks
4 – Free consumer advise avail at zillow and active rain among others
5 – Lots of consumers filling out forms and shopping for rates at lowermybills, getsmart, lendingtree, smarthippo, nextag, plus tons of exchange model leads
6 – Very few of those consumers in 5 above receiving any lender response due to 1-3 above
seems like a very risky bet with the 1M.
-this is a perfect itemization for why this technology makes sense and the time is right.
hmm… isn’t mortgage down during this economic crisis?
Now is the perfect time to be starting this business because there is so much confusion and hearsay about mortgages. Love the UI. Green. Money tones. Split infinitive tagline hurts my ear. Hypenated domain names are hard to remember. I would probably get aliases to similar sounding names, if possible, and forward.
Great post!
Thanks,
Ben Fryxell
http://macmaniapodcast.com
thats it – focus on the logo and URL…
I’ll add one last comment – I called Home Account’s 800 number today, and (surprise!) no one answers and it just rings and rings. Again, no biggie for a free product, but as one that’s got my credit card info and social security #, it sure is.
Hi Doug
How can I help you? I just checked out logs and we had no record of your call. Did you not leave a message and call back number. Free free to email us at support@home-account.com for anything you may need. Daniel.
this is an interesting concept. it would be a great benefit to a customer to be able to go to one place and get the best rate and lowest costs. people are trained to shop around, however, so how do you convince a potential customer that he can’t do better than what you offer him?
the reason people feel compelled to shop is that if you make 5 calls to 5 different mortgage companies, you probably get 5 different answers.
rate changes, fees, points, fannie and freddie “delivery fees”, etc all combine to make shopping for a mortgage confusing and difficult for the average borrower.
if you can convince the borrower that one stop shopping at home account will get him the best deal, you may have something going here.
bill
This business model makes no sense to me: why would I pay monthly when I get a mortgage once ever 5 – 10 years?
Mark
Thats what we thought too until we spent the past two years and identified all of the slop and payola in the mortgage market. If you want to pay full price at Bloomingdales go for it…but if Walmart has the same product for 30% less…you wouldn’t buy it. Stay tuned dude!
Since when does Bloomingdales and Walmart have the same products
well…they both sell Hanes underwear!
i’m familiar with Home-Account and it’s technology and I’m also in the old mortgage industry.
this service is an absolute bullseye.
just from the prior comments, it’s obvious that homeowners do not understand the mortgage transaction.
america has been conditioned to micromanage their mortgage based on a di-tech ad on tv or a ‘bait’ rate they see on the internet from some lead-gen outfit.
while the mortgage decision in America has been commoditized, the numbers that underpin the decision (credit scores, qualifying ratios, reserve requirements) change monthly.
to further add to this dynamic, property values change quarterly, consumer income changes annually, and the national underwriting grids (Fannie, FHA, Jumbo) are in constant flux–and some homeowners attempt to stay on top of this.
the average consumer is refinancing every 2-3 years because of this changing mortgage decision. This technology is a more cost effective way to manage these transactions.
this service provides 24/7 data, smart alerts based on exact data that advise the homeowner when to refinance based on numbers not humans, and ‘broker free’ marketplace that encourages low cost closings. This allows subscribers to take advantage of small changes in interest rates without diluting hard earned equity—All without having to think about it AND its automatic.
it’s certainly no quizzle—quizzle is simply a feeder mechanism to quicken loans which has the same self interest as all the old mortgage industry–fees and long term debt.
at Home-Account, there is no man behind the curtain (at least I haven’t found him)…nor is there even a curtain.
The other internet lead-gen services??? simply, multitudes of co’s that provide ‘blind quotes’– general quotes without microanalysis that most of the most credit worthly cannot qualify for–due to ratio requirements on the Fannie/Freddie, FHA, or Jumbo underwriting grids and/or prohibitive mortgage insurance requirements.
Home-Account.com and similar technology will be the clarion call for the homeowner to finally understand the mortgage decision and to know they can control it.
This value prop is big when one considers the average closing costs now in the US at $3-6K per closing.
I believe Home-Account and similar technology is what the homeowner is shouting for.