This ad for Quicken Loans’ “Rocket Mortgage” app aired during the Super Bowl on Sunday:
Wow. It is like the people at Quicken Loans who are responsible for promoting their Rocket Mortgage app somehow completely missed the previous housing bubble and the massive economic fallout when it burst.
Yes, let’s make it super easy for everyone to buy homes! What could possibly go wrong?
Neil Irwin at The New York Times summarizes the issues with this ad: The Super Bowl Ad That Set Off Economic Alarm Bells
The hackles this raised among the economic commentariat was instant. For a while during the Super Bowl, certain segments of Twitter were dominated not by talk of Peyton Manning and Cam Newton, but by snark. “Rocket Mortgage: Let’s do the financial crisis again, but with apps!” tweeted Dave Weigel of The Washington Post.
Reducing paperwork and bureaucratic hurdles to a mortgage are desirable in isolation; the homebuying process is laden with hidden fees and conflicts of interest that can add thousands of dollars to the price of a home purchase.
But the Quicken Loans ad goes a step further, with the narrator asking what would happen if the Internet “did for mortgages what the Internet did for buying music, plane tickets and shoes,” then showing a woman getting a home mortgage with the press of a button on her phone.
If taken too literally, this could get people in trouble. A home mortgage is the biggest financial obligation most people will take on. If you buy the wrong music, plane ticket or shoes, it’s probably not a crippling financial burden, where the wrong mortgage can be.
The current problem with the housing market is that supply is too low, not that demand is too low or that people can’t get a mortgage when they want one. There’s certainly something to be said for simplifying and streamlining the mortgage application process, but it should be focused on convenience for people who are already otherwise buying a home, not somehow luring suckers into buying homes because of how easy you made it with your app.