“Push a button...get a mortgage!”
That’s the promise made by mortgage lending service Rocket Mortgage in a controversial Super Bowl ad that gave some viewers flashbacks to the 2008 housing crisis. Bill Emerson, CEO of Rocket Mortgage’s parent company Quicken Loans, defended the ad Monday, telling Yahoo Finance the company stands by its product.
“There’s going to be controversy anytime you’re doing something new and different that many people may not understand,” Emerson said. “What we’re doing is taking an intimidating process and making it more efficient and more easy for people to understand.”
The ad features people purchasing mortgages on their smartphones while doing random tasks, like watching a magic show, working in a hair salon, working out, and, for some reason, whittling furniture legs. (Rocket Mortgage, which launched last November, isn’t actually an app at all, but a website built to be accessible on mobile devices).
On the site, Rocket Mortgage prompts you for personal information and pulls your credit reports, bank history and other factoids it needs. At the end of the process, you’ll find out whether you’re preapproved for a mortgage loan and have the chance to lock in a mortgage rate. But from that step onward, it will take a lot longer than 8 minutes to close your loan. You’ll still need to arrange an appraisal and additional steps like home inspection could slow the process down as well. Most loans close within 30 days, Quicken says.
Twitter erupted with tweets slamming the ad during the Super Bowl, arguing its central message (buy more homes, boost the economy) harkens back to the days of subprime mortgage lending that led to the housing bubble and bust. Generally, a subprime borrower has a FICO score under 640.
Emerson emphatically rejected assumptions that Rocket Mortgage would approve subprime borrowers, saying it’s “simply not true.”
“We don’t do subprime and we’ve never done subprime [lending],” he said. “If [borrowers] don’t qualify for a mortgage, they can’t get a mortgage.”
The Consumer Financial Protection Bureau, the agency responsible for reining in mortgage lenders after the housing crisis, took a jab at the Rocket Mortgage’s 8-minute promise on Twitter as well, telling customers to “take your time” when mortgage shopping.
Rocket Mortgage quickly responded.
Emerson echoed that response Monday. “The belief that people don’t have an opportunity to think about what they’re doing is simply not true,” he said.
At any rate, Rocket Mortgage is just one of many options prospective homebuyers have when looking for a mortgage. And, yes, shopping around is important. You should always compare rates with other lenders to be sure you’re getting the best deal. Unfortunately, this is a crucial step the vast majority of borrowers skip — 77%, according to the CFPB. A common myth is that having several mortgage lenders run your credit can hurt your FICO score, and it’s better to just stick to one lender. In fact, multiple credit inquiries made by mortgage lenders within 30 days won’t impact your FICO score.