The company will take the stage today at the DEMO 2009 conference in a segment dubbed “Stimulating the Economy.” As the name suggests, this company takes the credit crisis into account and offers advice to consumers who have been hit hard. Since it refused to take any money from the $11 trillion mortgage industry, the San Francisco company claims to offer unbiased advice that fits homeowners’ needs. If this kind of Consumer Reports-style institution was around five years ago, we might not have had this mortgage mess.
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This is probably the kind of service the government should subsidize to avoid future bankruptcies and bailouts. But there’s no reason why entrepreneurs shouldn’t try it as well. The company is giving away its Mortgage-Evaluator for free. But it will try to upsell consumers to a $9.95 a month subscription fee for a personalized recommendation and ongoing advice.
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The goal is to demystify the mortgage process, said Mark Goldstein, chief executive of Home-Account. The idea is good, but the business model needs more work. It may be hard to convince consumers that they should keep the subscription for more than a month. The logical course of action is to take the advice, get a loan, and be done with it.
[Update: Goldstein said that the company has to charge a subscription because ad-supported finance sites just aren’t generating enough money to justify the business. At some point, he believes people will add a la carte financial subscriptions as part of a larger suite. In addition, Goldstein says $9.95 a month is a small price to pay relative to how much a refinancing recommendation — at the right time, before the market window disappears — is worth if made in a timely manner. With its launch today, Home-Account says the site is already processing three mortgage evaluations per second.]
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