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Peter Carroll, the acting assistant director for mortgage markets at the newly formed Consumer Financial Protection Bureau, suggests that borrowers begin the process by reading the fine print of each site they choose to work with. “Understand the terms of use and privacy policies,” Mr. Carroll said. If you are shopping for loan rates on sites like Bankrate.com or LendingTree, also be sure to read their “frequently asked questions” section, industry experts say — and recognize, too, that these sites are businesses that make money by working with lenders, via a pay-per-click formula or by generating leads. If you provide personal information, including your credit score, find out how widely that material will be circulated. As Mr. Carroll put it, “Understand that many lenders may be contacting you.” At Zillow Mortgage Marketplace, the average number of rate quotes customers receive is 20, while at LendingTree it is 3 to 5, according to both companies. Most sites provide rates and other information only from lenders that are signed on as their customers. One exception is Bankrate.com, which offers one table that includes its lending clients as well as the five largest banks and other lenders in some 600 local or metropolitan areas. The online mortgage marketplace has become increasingly popular for borrowers researching loan rates and options. Some 1,200 mortgage-related Web sites are tracked by Experian Hitwise, and the top seven sites drew more than 22 million total domestic visits in April, up 24 percent from a year earlier and 74 percent from April 2010. The numbers are expected to grow with the wider use of smartphones and other devices. Doug Lebda, the chief executive and founder of LendingTree.com, noted that for the last three years, the difference between the highest and lowest rates available was “wider than it has been in recent history,” making comparison-shopping even more important. But he also pointed out that the advertised rates are “indicative rates but they’re certainly not offers.” Mr. Lebda suggested that borrowers also consider the mortgage initiation fee and closing costs. As they navigate through online mortgage sites, borrowers will need to find out the sites’ criteria for matching them up with lenders, and whether lenders can pay for higher placement. That’s where reading the fine print may come in. “Make sure you feel you’re in control,” said Erin Lantz, the director of Zillow Mortgage Marketplace. That way you can give your personal information out to lenders of your choice. And if a credit report is pulled by lenders, Mr. Carroll added, find out “what rights do they have to that information besides evaluating that loan request?” Borrowers will also want to learn about quality control at the sites they visit. Bankrate.com, for example, has a 40-person quality-control department that investigates consumer complaints and does what is known as “mystery shop” on various sites. LendingTree says it relies partly on consumer ratings and reviews, as does Zillow Mortgage Marketplace. It has more than 10,000 reviews to date, Ms. Lantz said, adding that the reviews are also vetted to ensure they are not from any lenders. Mortgage shopping sites will often advertise that they are making comparisons easier and faster for borrowers, but that could be counterproductive, said Sue Berkowitz, the director of the South Carolina Appleseed Legal Justice Center, which advocates for greater disclosures by these companies. “It should be time-consuming, and done with analysis.”
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