If you've paid your mortgage on time for the past year and you've got at least a 10 percent equity stake in your house, don't be surprised to find an interesting proposal in the mail from your lender.
It's likely to go something like this: Because we value you so much as our customer--and because frankly we don't want you to stray from the fold--we can now offer you a whole new relationship with us. All you have to do is visit a special World Wide Web site that we've set up for top-notch borrowers such as yourself. If you choose to join our "platinum club" program, simply keystroke in your e-mail address and you'll be able to:
* Check on the status of your mortgage account--current principal balance, total tax-deductible interest paid this year, escrow-account balances and transfers and much more--online at any time of the day or night. We'll give you a dedicated PIN that lets you see your electronic account file just as we see it.
* Pay your mortgage online using the latest secure technology. We'll never again need to send you a payment book or coupons, and you'll never again need to lick stamps and mail us checks. All you'll have to do each month is click an icon "paid," and you'll be done.
* Get online alerts if you're in danger of incurring a late-payment penalty. We'll e-mail you to warn you that you're nearing the penalty deadline, such as when you're still unpaid on the 14th day of the month and your payment was due on the first.
* Receive alerts custom-tailored to your account about capital-market changes that can save you money on your mortgage. Whenever we can save you $50 or more a month on your current mortgage, we'll automatically e-mail you and explain how. You'll never need to apply or qualify for a refinancing; all you'll have to do is click "yes," and you'll be refinanced within three seconds. You'll also be able to explore "what if" scenarios, comparing several refinance alternatives in detail to see which saves you most.
* Receive alerts on other products we offer--new mortgages if you're buying another house, second mortgages, lines of credit, property insurance and the like. We'll e-mail you only if you're pre-qualified; you'll never have to worry about a turndown.
And, of course, if you'd prefer not to be e-mailed about any of these opportunities, just click "opt out" and we'll never pitch anything your way. The cost to you of being a platinum mortgage club customer? Not a cent. The program is free to you because it saves us money in administrative costs to service you online. Sound fair enough? Then visit our Web site, and welcome aboard!
Five thousand customers of one of the country's largest mortgage companies received a proposal similar to this from their lender in late July. Within months, many of the largest banks and mortgage companies--servicing a huge chunk of the nation's $4.1 trillion of outstanding home loans--are expected to start doing the same.
The company behind this transformation, CustomersForever LLC, is a deep-pocket, high-tech Milwaukee-based joint venture. Two of the key players are MGIC Investment Corp., the country's largest private mortgage insurer, and M&I Data Services, a payment-systems-technology subsidiary of Marshall & Ilsley Corp., a company with $23 billion in assets. Heading the venture is K. Terrence Wakefield, who founded Prudential Home Mortgage Corp. in the 1980s.
CustomersForever is not a lender itself, and intends to stay in the background. Borrowers will never see its name on their own lenders' Web sites, other than a reference to Equix, CustomersForever's brand name for Internet-based loan services. (You can see CustomersForever's own Web site, aimed at lenders, at www.customersforever.com.)
What CustomersForever hopes to do--relatively anonymously--is to lead what Wakefield calls a revolution that "uses the Internet to shift power back to the [mortgage] customers who pay all the bills." Are there potential downside risks for consumers who sign up? Not if you really prefer to deal with your lender by Internet rather than mail and telephone.
As a participant, you're always free to refinance or borrow from whatever competing company you want, and to search other lenders' Web sites for better deals. And you're always free to say "no, thanks" to e-mail alerts about new cut-rate financing opportunities.
The main change: You're likely to be better informed about your mortgage and likely to feel at least slightly more valued as a customer.
For many borrowers sick of long telephone waits to get questions answered about escrows, late charges, etc., that sort of feeling can't come soon enough.