John McGuire thinks back to his 23 years in the mortgage lending business, and reminisces about how LenderStreet would have made his job a whole lot easier. “It would have been a huge win for our retail branch network,” McGuire said. Last December, after meeting with Red Nova Labs Chief Executive Officer Daniel Miller, McGuire realized nothing in the mortgage industry existed like the product he had been developing in his head: An online mortgage relationship search engine that could change the way consumers search for and work with lenders. The excitement of the idea pulled McGuire out of retirement in February, and he partnered with Red Nova Labs to develop LenderStreet, the Web site that will launch its pilot phase in June.
“I know it’s going to work because it is so unique,” said McGuire, who has been named president of the LenderStreet division. “It doesn’t exist today, and consumers and lenders really need it because it solves the purchase conundrum… When consumers buy a home, they want to experience the mortgage lending process locally.”
When consumers visit LenderStreet, they will fill out a survey to be matched with local mortgage lenders who are best fit for them, based on 14 different loan-specific criteria. Once matched, consumers can view profiles of the agents. McGuire calls it the “eHarmony of the mortgage world.”
Unlike other sites, consumers don’t have to provide personal information, and they decide the mode of contact: Picking up the telephone to call a loan agent, e-mailing or visiting the lender’s site.
“All of the Internet-portal, mortgage-portal activity that goes on—it’s all lead-aggregators,” McGuire said. “They try to bring consumers in to a single site, collect as much personal information and data from them as possible, and sell that data to the awaiting mortgage vultures.”
McGuire knows the system well, because he used it when he was the divisional president at First Horizon Home Loan Corporation, where he led a national telesales platform. McGuire would buy leads from LendingTree.com and similar lead-aggregation sites, and he would then have his employees try to turn those leads into sales.
“I had 150 guys with headsets in a room in little tiny cubes that all day would call and assault those people and say, ‘You indicated interest in LendingTree. What can we do for you?’ It was a high-pressured sales effort,” McGuire said. “Even LendingTree admits, their model is to sell leads to five different lenders, so every customer is going to get hit by five different people.
“What I realized is that none of that business, although significant, actually created a relationship between consumer and a local mortgage originator. These were all national call centers, typically highly trained in sales, not highly trained in mortgage planning. So there’s a real gap there in terms of quality and experience for the consumer.”
LenderStreet is not McGuire’s first venture into the online world of lending. In 1998, McGuire’s brother, Jim McGuire, bought a telephone number, 1-800-ONE-LOAN, from a saw mill in Canada. To the saw mill, it was just 1-800-663-5626. To the McGuire brothers, it was a chance to build their family’s mortgage company.
Jim wanted John to start a national retail loan origination service as part of McGuire Mortgage. Jim owned the company that their father, Ray McGuire, started in 1963.
John, who had been working with the Waterfield Mortgage Group in Indiana, returned to Kansas City to start the One-Loan division. Along with the 800-number, McGuire also decided to accompany it with a Web site, oneloan.com. At the time, Internet-origination in the mortgage business was almost nonexistent. Originally, the 800-number brought in much more business for McGuire Mortgage than the website, but over time the Web site started to catch up.The Internet now plays a much larger role in mortgage lending, as most consumers look for information online before diving into the mortgage process. The lending business has also seen a shift from refinance to home purchases, which makes a site like LenderStreet even more applicable.
“Another selling factor that made me realize this concept will be a winner was the online marketing approach of the traditional loan originator: publishing a website. Well over 90 percent of them post their own websites,” McGuire said. “Typically, they’re highly functional sites, but there’s virtually no way of driving local consumers to those websites. We fill that gap for them as well.
“We locate and direct purchase transactions toward them, and we help actually get people to their Web site, or, generate a phone call, because that’s an even more powerful personal connection.”
Red Nova Labs, a Web agency and think-tank based in Kansas City, Kan., is developing and marketing the site. Similarly, Red Nova Labs recently developed and launched StorageFront, a search engine for the self-storage industry that grew to well over a thousand listings with greater than 97 percent retention rate in its first few months.
McGuire’s goal for LenderStreet is to have several thousand loan officers using the service by the end of 2010, and to grow that to a substantial market share by the end of 2011. The pilot phase of LenderStreet will begin on June 18 with hundreds of loan agents in up to 20 metropolitan areas using the service for free. The pilot phase will run through July 23.
“We’re fortunate to have John McGuire heading LenderStreet in Red Nova Labs’ growing portfolio of local marketing portals,” said Dan Miller. “He is an accomplished leader in the home loan industry, with a proven track record as a forward-thinking businessman. With his leadership and vision, we’re confident that LenderStreet will see the same success as StorageFront, many times over.”
For more information, visit www.lenderstreet.com or www.rednovalabs.com.