Is Amazon Stepping Into The Mortgage Industry? – NMP
Speculation continues as to whether or not Amazon will get into the mortgage industry. Rumors have been circulating for the past few years, but as time goes on, the question has become more of a when than if. The idea doesn’t seem that far-fetched, especially after Amazon founder and CEO Jefferey Bezos launched his latest venture, the offering 10 minute commercial S.Speed drives at $ 200,000 per ticket.
The capabilities that Amazon has with its enormous wealth and technological capabilities fuel the imagination when it comes to revolutionizing the mortgage industry. Right now, lenders find it daunting to develop technology that provides great customer service and ease of use. Tech companies, on the other hand, have the knowledge and ability to create a user experience that appeals to the largest population of homebuyers: millennials.
Amazon’s current financial partnerships offer many opportunities for further projects. You could go down the same path as Quicken Loans by partnering tech company Inuit with Rock Financial. Or, like Zillow, they can become a direct lender by buying an existing lender. Another option is to choose a membership-only model like Amazon Prime, which uses mortgages as an incentive to join. Finally, there’s the mortgage broker franchise route that puts the burden of licensing and regulatory issues on the franchise’s shoulders, like Remax Holdings’ themed mortgage.
However, one of the main obstacles to pursuing this business is the lack of trust from Millennials. According to a survey by Fannie Mae, 16% of consumers trust their favorite financial technology company to meet their mortgage needs. However, this trust fails with larger technology companies like Amazon, as two-thirds say they do not trust a large technology company. The main concern of respondents was the lack of privacy and the possibility of a data breach. This could explain Google’s two failed attempts to launch Google Advisor Mortgage.
Last, Lakeside Title Company reported that Amazon is looking for banks that are interested in partnering up with an Amazon branded checking account while offering credit cards from Chase and Synchrony Financial as well as American Express. This should allow them to gain more experience in the financial industry.