LANDING LEADS Special publication brought to you by Broker Newswire

LANDING LEADS Special publication brought to you by Broker Newswire Mortgage lead generation: Where we are, where we’re going 4 Boost originations, build profits: How to maintain loan volume as refi wave roll out 7 Referrals and leads: How to bring the business to you 8 Top tips for generating leads 11 New lead generation models offer fresh ways to connect with customers 14 Using technology to drive sales: The future is now 19 Mission possible series: Tips for building leads, automating generation and maximizing lead lists 21 23 25 Sparking new lead series: Ways to set your sales on fire and refine your selling strategies 26 28 29 And much more... A compilation of Broker Newswire’s best-kept secrets to land leads, strategize sales and anchor your business amidst the wavering sea of industry change LANDING LEADS Page 2 Taking the pain out of paid leads Third-party mortgage and real estate lead providers have gotten mixed reviews at best. A new technology company hopes to change that. Paid leads have been a disappointment for many real estate and mortgage workers. They’re looking to third-party lead sources for new business channels, but those providers haven’t always been honest, reputable operations. Jon Neill, CEO of HomeGate Mortgage, has seen the good and the bad of paid leads. The company offers a range of mortgage products and operates in Ohio, Kentucky, Florida, Indiana and Colorado. Neill has been in the business a long time and has used most common types of lead sources, including telemarketing, direct mail, Web site lead generation through search engine optimization (SEO) and Internet leads, including purchasing leads from thirdparty providers and developing internal affiliate programs. “Pretty much any lead source you can think of, I’ve used,” he said. He describes Internet leads as “hit and miss,” saying the key is to make sure you’re working with the right company. “I’ve always looked for the integrity of who you’re doing business with,” he said. “If you’re buying Internet leads and you don’t know the company, you can end up with leads — and I’ve had some of these before — that weren’t even sourced on the Internet. They may have been sold in excess of what you’d been told, or they might be stale. Some of the data can be out there for as much as a year, and people repackage and sell it.” The number of Internet lead vendors has exploded. How do mortgage brokers find someone they can trust? Neill suggested they talk to someone at the lead provider to determine who owns the company, their business model, how they source leads and whether they have affiliate programs. Word of mouth remains the best way to find a trustworthy business, he added. Neill said he’s found the right lead source in LeadPoint, a new company that offers a “free market” technology platform where users can bid on and sell leads. Leads come from both online and offline sources and are priced based on bids, performance and ratings by members of the LeadPoint community. Neill estimated he has bought about 100 leads to date, paying an average of (Continued on page 3) LANDING LEADS Page 3 (Continued from page 2) $25 to $30. He said he likes the system because he feels he’s paying a fair price. “You can get an exclusive lead or a shared lead,” he said. “How much you pay depends on how much you bid and how much other people want it. Fair pricing is a huge advantage to this system.” He can define the types of leads he wants, including whether he wants to share leads and what parameters he needs. For example, a broker might bid for individuals in California who want to refinance a home a worth at least $500,000 and borrow at least $300,000. The quality of the leads has been high, Neill said. Based on the appraisal volume he’s generated, he estimated he’s converting 4 percent of the leads, which he describes as the benchmark for brokers. Still, that number can be daunting for brokers who are new to Web-based business. “The tough thing with evaluating any lead source is that a 4 percent conversion rate means you’ve failed 96 percent of the time,” he said. “It’s difficult for some people — particularly people with a more traditional broker background — to enter into a channel, fail 96 percent of the time and be happy with that.” Another benefit of Internet leads, he said, is that you end up with higher loan balances because borrowers looking to take out larger loans take the time to research rates and payments online. Neill said he is not aware of any similar services on the market. A new approach The idea behind the LeadPoint platform, according to Marc Diana, founder and CEO, is to serve as a Why should I care about online leads? Many brokers are doing well with traditional models — repeat customers and referrals. Why should they consider online leads? According to Diana, it depends on how they want to run your business. “Customer retention should be No. 1 on any business’s list,” he said. “It doesn’t cost anything. Word of mouth and referrals is No. 2. That’s going to be near free, with a higher propensity to close. If you’re satisfied with the size of your business, then you don’t need any more leads. But if you want to expand, you need to find other channels, which could include purchasing leads, buying clicks from Overture and Google or running ads. Buyers are finding that, with those paid channels, the lead source is turning out to be one of the most viable ones out there.” LeadPoint is initially offering mortgage and debt-related lead products but plans to expand into other real estate. neutral party monitoring lead quality. LeadPoint runs its own technology algorithms against the leads, the lead flow and the buyers and sellers. Those algorithms perform analysis to determine lead quality. There’s also a call center that interacts with pre-sale and post-sale leads. Workers in the call center determine whether a lead completed an application, has expressed interested, is now a broker’s customer, etc. “All those points of feedback that a lead buyer could give as he’s going through his sales process, (the call center) pumps back into our marketplace. That’s a key source of data that helps our algorithms run against the lead flow,” Diana said. Based on that information, LeadPoint can match the data points from sold leads to predict the quality of new leads entering the system. The leads include about 25 data points, including contact information as well as specifics for the product the consumer wants to buy. If it’s a refi lead, the buyer gets the home value, first mortgage balance and interest rate, the type of loan the consumer has, employment information, etc. The lead can be delivered to the buyer via e-mail, a post into a system such as an LOS or into a lead management application. “The paid lead model has failed some individuals (in the past) for a couple of reasons,” Diana said. “One is the way they process the leads. Sophisticated lead buyers are on the phone with a lead within 5 minutes of it hitting their system. If they get an email, go to lunch and get to it 4 hours later, that consumer could be on the phone with someone else. So their internal system can be a barrier.” Others don’t have control over centralized information around the different lead sources and how they’re performing, he added. They use anecdotes to judge lead quality, as opposed to analytical data. Another problem has been fraud. Many lead sellers have been unethical and sold supposedly exclusive leads to many companies. They might also recirculate a batch of leads 60 or 90 days later. LANDING LEADS Page 4 Mortgage lead generation: Where we are, where we’re going For mortgage brokers and lenders, lead generation and management are especially important because business is no longer walking through the door the way it has in recent years. More than ever, originators such as mortgage brokers have to scour for quality leads and work to maintain the relationships they have. Because the Web has empowered consumers to research financing options and interest rates and shop a larger market for their loans, some mortgage workers are turning to lead systems to tap into this online activity to expand their client base. Even brokers who still rely on traditional methods — referrals and past clients — for business are turning to technology to manage those relationships. Look no further than your filing cabinet As with real estate workers, pain points for loan originators include lead qualification and turnaround time. They have access to many lead sources these days. Finding quality leads is the challenge, according to John Anthony and Mike Vernon, mortgage brokers and members of the technology committee for the National Association of Mortgage Brokers (NAMB). “People say they have the quintessential lead system in place, and more times than not, it may not be the case,” Anthony said. Brokers have numerous options for buying leads, and can purchase them based on many preferences. However, the more targeted the lead, the more the broker will have to pay. Anthony uses a variety of strategies to acquire and manage leads. His company is searching for the “allencompassing” system that will should come from,” Vernon said. “In my office, I buy very few leads and do very little advertising. All my business is based on real estate referral and past clients. … If you can manage your database as a lead source, you will maximize your relationships.” Another type of lead generation system some brokers use is a full computer system package. The vendor sends a computer, which distributes faxes to consumers, who then respond by asking for a mortgage. Anthony said his company tried one of these systems, but got burned by an unscrupulous vendor. “You have to be very careful in checking into whom you’re talking with,” he said. “Make sure they’re involved with NAMB and NAMB has checked into them.” He said more and more lead management systems are becoming available, as evidenced by the increased vendor presence at NAMB conference exhibits. Both agreed that simplicity is key in broker lead technology because many brokers aren’t tech-savvy. “The more time I spend trying to manage a database, a program or system on how to track leads, the less time I’m on the phone making money,” Anthony said. How do brokers find the right tool? Anthony said many brokers won’t share information on the technology they use, due to the competitiveness of the industry, but conventions are useful for locating appropriate tools. automate the process so he can spend more time on the phone with customers. “The lead sources available today are finite in their usage,” said Vernon, who also owns a technology company, FollowYourCustomer.com, which offers a lead generation system. “You have telemarketing, which can be generated from lead lists, either from the courthouse, credit reporting agencies or other list generation systems. You have Internet leads, where a company markets to the Internet to sell you a lead. The third avenue is referral/repeat business.” Vernon said his company’s system addresses this last category. It electronically tracks brokers’ databases and helps them maintain client contact by reminding them when, for instance, an adjustable-rate reminder is due, a client’s birthday is coming up or it’s time to send a past customer a postcard. It’s important to hang onto past clients, he said, because most people buy five to seven mortgages in their lifetime. Brokers pay about $50 a month for the service. “Your filing cabinet is where your leads (Continued on page 5) LANDING LEADS Page 5 (Continued from page 4) If it ain’t broke, brokers don’t fix it Like real estate, the mortgage business has historically been driven by word-ofmouth referrals and repeat business from loyal customers. For some of the most successful businesses, that still works. Van Johnson, president of the Florida Association of Mortgage Brokers, said the tried-and-true referral method has served him well for 20 years — he averages 300 loans per year — and lead technology hasn’t really caught his attention yet. “This is kind of strange. I don’t know anything about it,” he said. He receives frequent phone calls from lead salesmen, but said he’s never used them. ”All my business is direct referral business,” he said. “I’ve never looked for leads.” He attributes his success to the fact that he was the first mortgage broker in his market, which is still small. Still others are investigating new lead sources and systems. Internet lead services are popular but “a dime a dozen,” according to Bryant Christian, owner of Statewide Financial Services in Ohio. For him, they’ve proven to be a dead end. He said lead brokers are charging exorbitant fees for leads that aren’t even exclusive — sometimes three other companies get that contact information. When that’s the case, brokers have to determine whether that lead is even qualified — ready and able to secure a loan — and then they have to be the first one to contact the consumer. “You could have someone who’s just browsing and not really serious,” he said. “You’re paying upwards of $25 to $50 for a horrible lead.” The $50 fee might be for an exclusive lead, but even then, a broker might have exclusivity for only a day. Another issue is simply keeping track of the lead lifecycle. “There needs to be more technology available that lets me take those (leads), get them to my guys and keep better track of what they’re doing. Are they calling quickly enough? How soon are they responding?” he said. He’s looking at some new strategies that focus on in-house lead generation, which should be less expensive. For competitive reasons, he didn’t divulge too much information on his company’s plans, but said he’ll dedicate both human resources and technology to generate more business. Christian said his ideal system would have software for in-house use but that also accepts external information from lead providers. It would let him assign a broker to that lead and then track the status. That system should then interface with his processing software, he added. Comparing Realtors and mortgage brokers Mortgage brokers and Realtors often pull their leads from different sources. Realtors market mostly to consumers, but mortgage brokers can target consumers, Realtors, homebuilders, accountants, etc. However, some say mortgage brokers would do well to take a page from the Realtor playbook when (Continued on page 6) LANDING LEADS Page 6 (Continued from page 5) it comes to “farming” leads and retaining them. “Not a day goes by when I don’t receive something from my real estate who that sold me a house 10 years ago,” said Rob Boitano, president of LSI Credit Services, which offers the Lead Locator Plus online lead system. “I’m not sure mortgage brokers have that kind of system set up where they’re constantly ‘pinging’ their past borrowers, notifying them that rates are down and it may be a good time to refinance. They have all the loan data, and they know what that loan was. I think they could farm their own data better and solicit their internal customers.” Mark Lesswing, vice president of the National Association of Realtors and director of its Center for Realtor Technology, said the lead techniques are similar for the two sides, but the incentive strategies mortgage brokers use are more sophisticated than those of Realtors. On the mortgage side, the incentives offered to consumers tend to be the lure, he said. Managing do-not-call lists Since the do-not-call laws went into effect, some lenders have already faced stiff fines for making unsolicited marketing calls to consumers. Vernon gave the example of a friend who bought a “predicated dialer” that automatically called consumers from a set of numbers. One of the people it called took the broker to court because he had registered on a do-not-call list. Many lead generation tools help mortgage brokers avoid problems by ensuring they’re only dealing with “optins” — those who have requested more information. Boitano said the laws have limited what mortgage brokers can do over the telephone, and he’s now seeing more direct marketing, with loan originators creating print marketing pieces and mailing them. A combination works best, he said. Brokers should combine direct marketing campaigns with other mediums such as e-mail. The laws have definitely increased marketing costs for Christian’s brokerage. He has an employee dedicated to monitoring the do-not-call policies and downloading prohibited numbers from a national database. New strategies in lead generation A number of companies are looking to take lead technology and methods in new directions. One area they hope to improve is referrals from real estate businesses. By strengthening ties with Realtors, mortgage brokers and lenders hope to win more business from them. One mortgage broker making headway in this area is The Power Funding Group, which has real estate and mortgage companies and is investigating ways to integrate them. It has a beta test site that uses MLS data to generate leads for its mortgage business. Potential homebuyers come to the site, which uses the MLS data to direct them to top-producing Realtors for the area in which they’re interested. A key goal for the company is to establish strong relationships with those Realtors, according to CEO DK King. The benefit to consumers is they get a neutral directory of Realtors, as opposed to a site where Realtors pay to be listed, she added. “It’s very simple, but it’s a different twist in what’s been done,” she said. Another example of lead innovation could help lenders pinpoint potential leads before any contact takes place. Consider LSI Credit Services’ Lead Locator Plus, which searches LSI’s property database to find qualified leads based on factors such as loan-tovalue, interest rate, refi status and mortgage characteristics. Boitano said Fidelity’s LSI is working on a technology involving “life event triggers.” “We’re getting to the point with the data that’s available that we are able to predict when someone’s going to be looking for a home,” he said. “If there are children in the family who are going to college, that may prompt someone to look for a home equity line of credit to provide support for them through college. If somebody’s getting married, that’s a clear trigger that they’re probably going to be looking for a home.” Fidelity is looking to combine its data and products — such as streamlined title insurance approvals and property and credit data — to give lenders more solid leads so they can simply send off a loan package before soliciting consumers. “Rather than sending a direct marketing piece, we may just send a loan package and let the borrower sign away,” Boitano said. LANDING LEADS Page 7 Boost originations, build profits: How to maintain loan volume as refi wave rolls out We’ve all heard the warning: As interest rates rise, refi volumes will drop. So what’s a mortgage broker who depends on refis for a large part of his/her business to do? Here, a mortgage consultant gives tips on how to boost your foothold in the purchase money market and increase your referrals. “These people are dying. These people are hungry. These people are wondering, ‘Now that the refi business is gone, what do I do now?” said mortgage industry guru Ron Vaimberg. At an educational session for mortgage brokers on how to bring in more business, Vaimberg attempted to explain the customer psyche, and gave tips on how to turn a “no” into a “yes.” “The level of incompetence in the mortgage industry has never been higher,” Vaimberg said, but explained that that gives mortgage brokers who educate themselves about the industry and learn from other’s mistakes an edge in the marketplace. He said that many mortgage brokers fall into certain patterns of behavior that the industry does en masse, and that by stepping outside of this mold, an enterprising broker can set themselves apart from the competition. More specifically, Vaimberg said that the No. 1 complaint against mortgage brokers from both consumers and Realtors is that they “didn’t know what was going on.” “People do business because they perceive the value of the service to be greater than the price,” Vaimberg explained. Thus, working on ways to keep the parties to the transaction better informed on what is going on can lead to a stronger relationship with them and thus lead to more business later on, as satisfied customers will recommend you to friends and family, and satisfied Realtors will send you more business, Vaimberg said. Regarding customers in particular, “You never, ever want people doing business with you because of the rate,” he said. “When people want to do business with you, you never have to close them because they will close themselves.” In communicating with consumers, Vaimberg said that it was important that you “don’t use language with customers that they don’t know.” If the information you are trying to communicate just goes over their heads, you won’t be able to build a rapport or establish a connection with them, because they will feel intimidated and confused. “We buy with emotion,” Vaimberg said. “And we justify our decision to buy with questions.” Vaimberg said that many mortgage brokers complain about consumers being unwilling to share details of their financial situation when calling to ask for rates. They just want to know the rates and don’t want to answer any questions the broker may have that could help them better determine what loan product that customer would be eligible for. In order to combat this, Vaimberg said that it’s important to “tell them the benefit of answering your questions before you ask.” When a customer calls to ask for rates, ask them if they want just any rate or if they want one that they qualify for and that you can deliver, Vaimberg said. That will open the door for more discussion about the different rates and mortgage products available, and is a good start to building a relationship with a customer that could lead to an eventual closed transaction. “Don’t just say, ‘I have rates from 1 percent to 13 percent, which do you want?’” Vaimberg said, “because they will always ask for the lowest rate, and that may not be one that they qualify for.” But once you have a potential customer on the hook, the next big step is reeling them in. LANDING LEADS Page 8 Referrals and leads: How to bring the business to you We’ve all heard the warning: As interest rates rise, refi volumes will drop. So what’s a mortgage broker who depends on refis for a large part of his/ her business to do? Here, a mortgage consultant gives tips on how to boost your foothold in the purchase money market and increase your referrals. In a previous story, Broker Newswire shared mortgage industry consultant Ron Vaimberg’s tips for getting the attention of potential customers who call your office asking for your rates. Then it heard his and consultant Deborah Peters’ tips for using communication strategies to build rapport and gain agreement with your customers, both useful tools in closing loans faster and increasing your productivity. But that’s only half the battle. Because without having customers to work with in the first place, all of those strategies become moot. According to Vaimberg, however, the key to building your referral base so that people will send business to you is to “build the business of the other.” “There are two questions you need to ask yourself,” says Vaimberg. “One: ‘How can I help my clients build their business?’ Two: ‘How can I give my clients ongoing support for growth?’” By clients, Vaimberg is primarily talking about Realtors as sources of business. In order for them to send you referrals, he says, “You need ask yourself how you can help solve their problems.” Please note that “solve their problems” does not mean throwing money or incentives at them in violation of RESPA. Vaimberg says that first you have to understand what the biggest challenges for Realtors/mangers are and start there. From his experience in talking to Realtors, Vaimberg says that the challenges he hears them cite most often are “sales training, lead generation and time management.” Regarding sales training, he noted that their licensing courses “don’t teach them how to sell, they teach them how to comply.” But you can help, he says. “Become an educator, trainer and resource. Become a real estate and mortgage expert by reading industry publications and studying up on the market. Invest in tapes, books, seminars and industry tools so you have inside knowledge to share with others.” Instead of giving Realtors gifts for the referral of business, give them the gift of knowledge with no strings attached and they will often respond by sending business your way, Vaimberg said. “Teach your clients how to market, sell and save time.” Vaimberg also emphasized the importance of including your picture and contact information when you start handing out anything, so that they will remember you. Regarding lead generation, Vaimberg talked about the hidden possibilities in “creating a market.” He used an example of a flyer that says, “If you have $5,000 in savings, your dream of owning your own home might only be 30 days away? With as little as $5,000, you can probably own a home just like this!” The flyer includes an illustration of a (Continued on page 9) LANDING LEADS Page 9 Lead generation: Gimmick or wave of the future? With referral fees coming under fire by HUD, and old-fashioned, word-ofmouth referrals lagging with a slower paced housing market, more mortgage brokers are spending extra bucks to sign on to a lead generation Web site. David Dickinson, a BankersOnline.com guru, reminds mortgage brokers that lenders are prohibited from paying a referral fee to a mortgage broker under RESPA — in fact, referral fees are prohibited by 3500.14(b) of RESPA. Ever since the refi boom ended last year and rumors of a lag in the housing industry have flourished, brokers and loan originators have had to scramble for leads. But lead generation sites are often not exclusive and thus, have become quite competitive. Creates larger net While surfing the Web for leads has in many ways, simplified the process, it has also empowered consumers to research financing options and interest rates and shop a wider market for their loans. This makes it tougher for brokers to claim the local market. (Continued from page 8) house and lists specifics such as number of bedrooms, baths and square footage. The key here, Vaimberg said, is that the flyer could help bring in potential customers who otherwise may have not even been considering buying a home. Thus, you are creating your own leads, rather than having to go out to find them. Also remember to “provide leads for your clients,” he said. Vaimberg advocated the use of call capture technology and advertising listings to generate mortgage leads, generate buyer leads and to help you “become a value-added resource.” He also discussed ways to “grow your ‘source’ referrals.” “Who can your referral sources refer in order for you to grow your business? Customers and professionals,” he said. “Who are potential referral sources that can assist you in building your business? Realtors, attorneys, accountants, insurance agents, financial planners and others.” Vaimberg emphasized that allow these referral sources may be fully aware that you are in the mortgage business, they may not realize that you would appreciate referrals until you ask. “Everyone is asking the referral sources for clients,” he said. “You need to ask your referral sources for people that are in the position to refer your qualified clients.” Vaimberg then provided an example of a “referral source matrix” for brokers to use. But the key to remember is, “ask and you shall receive,” he said. HUD prohibits mortgage brokers from giving or receiving referral fees — or And even brokers who still rely on anything of value such as tickets to sporting events or the theater — or risk traditional methods — repeat clients, returning telephone calls and word-ofbeing fined and losing their licenses. mouth referrals — have turned to lead More than one industry insider has said generation sites. brokers and loan originators like the Consider mortgage broker John lead generation option because the Anthony, also a member of the leads generated are legal. technology committee for the National Association of Mortgage Brokers Gina Adams, chief financial officer of Salt Lake City-based Valhalla Mortgage (NAMB). Co., believes the lead generation route Anthony uses a number of strategies to is the way to go to grow new acquire and manage leads, but customers. complains the more targeted the leads, the more expensive the referral list. Valhalla is listed prominently on Mortgage-X Web.com, one of the most Playing it both ways popular lead generation sites in the Anthony’s company is searching for the nation. “all-encompassing system” that will automate the process so he can spend “Lead generation is the wave of the more time on the telephone with future,” Adams told Broker Newswire. customers. “We normally get referrals from consumers and from other mortgage brokers. But on Mortgage-X, the leads NAMB committee member Michael Vernon, owner of FollowYour are easier to obtain — and the consumers who log onto the site seem Customer.com, which offers a lead generation system, explains, “The lead more responsive. sources available today are finite in “For us, it’s also a way to get our name their usage. out there and get people to contact us,” “You have telemarketing which can be Adams said. “Mortgage-X also helps hook up lenders and brokers with new generated from lead lists, either from (Continued on page 10) clients.” LANDING LEADS Page 10 (Continued from page 9) unsolicited marketing calls to consumers. Lead generation systems help mortgage broker avoid legal problems by ensuring they’re viewing the names of consumers who “opt-in” to a site. Bryant Christian, owner of Statewide Financial Services of Ohio, claims internet lead generation companies are “a dime a dozen,” often proving to be a dead-end. Lead brokers are charging exorbitant fees for leads that aren’t even exclusive, Christian said. Brokers also have to determine whether each listed lead is even qualified, ready and able to secure a loan. Then the broker has to be the first to contact the consumer in order to secure a loan. “You could have someone on the site who is just browsing and not really serious,” he said. “So often you are paying upwards of $25 to $50 for a horrible lead.” Christian said the ideal system would offer software for in-house use, but would also accept external information from lead providers, let him assign a broker to that lead and then track the status. Earlier this year, Most Home’s ClientBuilder lead service — which combines a call center with a lead management system and online lead capture forms, researched lead generation sites. ClientBuilder found 46 percent of all internet leads were real prospects, and 4 percent of the total leads are ready to talk to an agent. Several customers of Mortgage-X.com logged in to praise or complain about the service. Otha Perry of Countrywide wrote, “By the time I got most of the leads, the borrowers were working with someone else. There were no contacts and two were just bogus. In the final analysis, not one of the leads I received produced. “It’s quite frustrating not to have one successful lead,” Perry said. “I can’t afford to throw away money like that." Nathan Edmisten of Fidelity Mortgage Lending, wrote: “Looking back over our closed loans from the past year, we didn’t close any leads from the program, and felt we could use our resources better, elsewhere.” Marc Savitt, owner of his own mortgage broker firm in Martinsburg, W. Va., said a lead generation is simply a marketing tool that often sells or provides lists to brokers and lenders of between 50,000 and 70,000 potential customers. “Our company is a little different,” Savitt said. “We’ve been in business 20 years and have not used any lead generation sites or mailing lists or bought any space or advertising on them.” But even with an increase in legal lead generation tools, RESPA violations still go on, he said. “I’ve had a Realtor come up to me and offer referrals in return for a computer or show tickets,” Savitt said. “I’ve always refused because accepting or giving anything of value in return for a referral, is illegal.” One of the most blatant examples of paying for leads occurred at a recent state trade show, he said. A large national lender at a recent trade show asked Savitt to donate $1,000 so a Realtor could be presented with a car. It turned out three cars were given away to three different real estate agents. And it was a Realtor who solicited the quid pro quo from the lender. “When I told them I couldn’t pay in because it was illegal, I was told not to worry about it because everybody does it,” he said. the courthouse, credit reporting agencies or other list generation systems,” Vernon said. “You also have internet leads, where a company markets to the internet to sell you a lead.” To capture the referral/repeat business, Vernon’s company electronically tracks brokers’ databases and helps them maintain client contact by reminding them of client birthdays and other pertinent dates. Brokers pay about $50 a month for the service. Hanging onto customers is crucial because most people buy five to seven mortgages in their lifetime, he said. “Your filing cabinet is where your leads should come from,” Vernon said. “In my office, I buy very few leads and do very little advertising. All my business is based on real estate referrals and past clients.” Lead generation business may be on the upswing, but many brokers aren’t tech-savvy and complain about computer breakdown. The telephone is still the mortgage broker’s most effective tool. Van Johnson, president of the Florida Association of Mortgage Brokers, is sticking to the same referral method that has served him well for the past 20 years — to the tune of an average of closing 300 loans per year. “All my business is direct referral business,” Johnson said. “I’ve never looked for leads.” Yes, Johnson does receive cold calls from lead generation salesmen – but always says no. But sometimes using the phone can be dangerous. Ever since the do-not-call lists went into effect, mortgage brokers and lenders have already faced stiff fines for making LANDING LEADS Page 11 Top tips for generating leads Mortgage broker Norman McBride credits his success to a personal Web site; Brad Kent, president/CEO of Smartleads Inc., swears by mass mailers; while mortgage guru Jack Davis believes in pushing the right buttons. Each of these successful businessmen has taken a different road to generating leads. While most loan originators and mortgage brokers lean in any one of these directions, most will take several routes to capture those elusive new homeowners — especially in this post refi era. McBride, a Huntington Beach, Calif.based broker, says the mortgage business is “100 percent driven by technology — and a mortgage broker without a Web site is a mortgage broker without a lead. “Back when I was struggling to get real estate business, I was working way too hard for the amount of money I was bringing in, using all the ‘old ways’ by cold calling on offices and spending weekends visiting open houses,” McBride said. “But I was getting more exhausted and frustrated. “There are days when customers are just not that nice,” he said. “One day someone asked if I’d ever considered getting a Web site.” He chose www.myers.com, one of many sites that market to mortgage brokers. McBride liked the idea of getting new prospects without worrying about the “tedious time-consuming application process – and still getting business after calling it a day.” He started with a standard Web site and upgraded it with streaming video and bells and whistles for marketing. “Any loan officer who doesn’t have a Web site is dramatically behind the times,” McBride said. “It’s sad, but a lot of them don’t have an Internet presence and it’s really the key to their success. It’s my lifeline to the world outside. “If you help people and make them successful, you don’t have to worry about yourself. If you get a lead, get them pre-approved and take them to a Realtor and they have a million dollars to buy, you have a relationship with that Realtor that’s going to last a long time. I’m thrusting my Web site out to the mainstream, getting it self-sufficient to the point of having four or five leads a day to follow up on. “Now that I consistently close $20 million every month, I am moving toward my next goal of $50 million a month,” McBride said. Kent has chosen a different direction. Five years ago Kent founded Smartleads USA, based in Palm Harbor, Fla., to provide leads via customized mailing lists and direct mail services. “Right now direct mail is working better than it has in years,” Kent told Broker Newswire. “However, the list must be very specific and very selective. Certain pockets of the country are responding much better than others.” Kent has been involved in the creation, text and data selects for more than 283 million pieces of mortgage mail for companies across the United States. (Continued on page 12) LANDING LEADS Page 12 (Continued from page 11) “Choose your geography and we’ll find out how many new movers enter your market area each month on average,’ the Smartleads USA Web site states. “Cash in on getting to this lucrative data source before your competition even knows they exist.” Kent’s mortgage lists include: FHA/VA, a “hot list of government loan borrowers”; special conventional and jumbo, “a listing of select data from a period with the highest historical rates … leaving high rate prospect”; subprime, “from bankruptcy data to tax liens and judgments, this file is updated daily in more than 1,200 counties nationwide. “Right now, subprime direct mail is working better than it has in months,” Kent said. “Our combination of discharged bankruptcy data and lender select lists, paired with our responsive creation, is a one-two punch that is tough to beat when it comes to ROI.” Kent has paired up with former mortgage broker and motivational speaker, Jack Davis, lecturing to broker groups across the country. Their act includes part motivation, part tips for getting leads and part hawking Davis’ Tactical Survival Kit and one of Kent’s Direct Mail Guides. Davis, of Mission Viejo, Calif., who rose through the ranks from a loan originator to vice president of a 65branch mortgage company, is from the old school. He believes brokers need to promote themselves, know when to close a deal and return phone calls. He coaches brokers on how to get rid of their fear of asking for referrals, of rejection, of asking personal questions and of the telephone. Having a fancy Web site or a great list of names won’t help if you are afraid to close, Davis said. (Continued on page 13) LANDING LEADS Page 13 (Continued from page 12) publicity. “The click-through mortgage marketing sites and banner advertising options prove worthless, with most of the customer inquiries, garbage,” he said. “Personal contact is still important and necessary, but a two-minute call allows me to speak with 30 people in an hour instead of three or four people,” Cummings said. “This strategy has permitted me to drastically cut down on personal phone time,” he said. “Thus, the Web site has allowed me to increase production, while decreasing my ‘time investment’ on each loan.” But the best Web site won’t help if no one can find you. “Try looking up mortgages on the Web and you’ll find more than 13 million sites to choose from,” he said, urging brokers to do their homework before choosing the technology to develop and design a site. Brian Sacks take pages out of McBride, Kent and Davis’ books when it comes to generating leads. Sacks, a branch manager at Integrity Home Funding LLC in Owings Mills, Md., uses his Web site to market his message. “In today’s mortgage market, it’s not how much you know about running your business, nor is it all the mass Internet and telemarketing leads you buy that determine your income,” Sacks said. “It is how effective you are at marketing your business that determines the balance in your bank account.” Sacks uses his Web site to sell his Gold System which he describes as a marketing plan that integrates advertising, direct mail, promotions and “I’ve integrated advertising, very effective direct mail, promotions and publicity into my system,” Sacks said. “Just placing ads and hoping enough people call you will just not cut it anymore.” For multi-billion originators like Wells Fargo and Wachovia, Web chats and cobrowsers are attracting attention. The chats give perspective borrowers a chance to “talk it out” online. Wachovia even allows online chats between its mortgage customers and the bank’s mortgage specialist during the loan application process. Applicants who could chat in real time with a mortgage agent were 25 percent more likely to close with Wachovia, said Joan Sommerer, vice president of lending solutions at Wachovia, a $22 billion originator which gets about 10 percent of its mortgage business via the Web. “The Web site gives customers validation … and helps them understand how mortgages work,” Sommerer said. “Customers want to shop without the presence of a sales person.” David Hershman sums up the three tenets toward success: marketing, sales and customer service. Hershman said mortgage brokers must differentiate themselves from the competition, learn the three economic reasons to own a home and why owning a home is called the American dream — and become an expert in sales and marketing. Keep it simple Chip Cummings, consultant and president of Grand Rapids, Mich.based Northwind Financial Group, says cute Web gimmicks won’t buy a lead if the customer can’t find a broker. Cummings’ own Web site, www.rumcreek.com, is simple and direct with an online questionnaire. “There are many ‘pre-fab’ template Web site construction models available, and it was easy to use these models as a foundation to start from,” Cumming said. “I didn’t want to spend a lot of money trying to re-invent the wheel, so I used Ellie Mae which allowed me some flexibility and customization features, as well as providing help in planning out the overall Web site design.” Cummings also said his message and applications had to work seamlessly with his origination software. “I knew I’d have seven seconds to capture the customers’ interest when they visited my site,” he said. “I asked myself if it was attractive, understandable, easy to use — and if an 8-year-old could navigate it.” “You can have the greatest Web site in the world, but it’s worthless without the magic ingredient — traffic,” Cummings said. “I also had to embrace the fact that my Web site was not just my marketing tool — the Web site was my company.” To be profitable, “your Web site has to be the central focal point of all other forms of marketing, working 24/7 without a break or sick day, without an attitude problem — a perfect employee who can take 1,000 applications simultaneously at 2 a.m. on a Sunday,” he said. Cummings also sends out free electronic e-zines to communicate with 10,000 customers quickly with links to his home site at a touch of a button. LANDING LEADS Page 14 New lead generation models offer fresh ways to connect with customers Matchmaker, matchmaker, find me a find, catch me a catch, make me a match…. In today’s bustling, wide Web world of marketing, mortgage brokers and loan originators often scramble wildly to find qualified sales leads — and match the right lenders to borrowers to close on the deals. Chad Perry, president of CaptiveLeads.com of Orem, Utah, boasts of increasing qualified leads for the real estate industry by as much as 200 percent from one month to the next. Daniel Itkis, the CEO of BNTouch out of Portland, Ore., brags that his recently developed portal, BestInMortgage.com, is the place where borrowers can get advice from participating loan originators. But the site is marketed as a matchmaker since it allows potential borrowers to interact with originators before committing to the loan process. Both Web sites are geared toward helping mortgage brokers find, catch and match those elusive leads. At the same time, E-Loan and Lending Tree have continued their aggressive trolling for leads in a race won by the first loan originator to reach the customer. That translates to a cell phone with a speed dial. A few years ago, the industry was flooded with refinancings, but today, mortgage brokers are hustling to find leads among customers looking to buy new homes. And industry experts agree that the fastest, surest way to a new customer’s business is the Web. Let the games begin Perry founded CaptiveLeads.com and is also president of BuyLookSell Inc. “The CaptiveLeads concept is a combination of two business ideas,” Perry told Broker Newswire. “We originally introduced BuyLookSell Inc. with the sole focus to compete in the online classified advertising market — specifically, the automotive, employment and real estate markets. “After several test markets, we learned that the most successful adoption of our service was a ‘free classified advertising’ model. “The dot.com era taught us many things — one of those being ‘free internet’ models rarely succeed. We were not — and still are not — confident that free classifieds are a sustainable long-term business proposition.” CaptiveLeads.com actually grew out of frustrations wrought from previous sales management careers in the hightechnology industry, he said. Cold calling freezes business “In high-technology circuits, cold calling rarely worked,” Perry said. “The odds of being in the right place at the right time in a mass market were low. Historically, we knew that leads and referrals were by far a better use of time and energy — but we never seemed to have enough of either. “As we shared these same historical frustrations with the real estate marketplace, we found that they were universal: Cold calling was practical, but ineffective, and leads were far and (Continued on page 15) LANDING LEADS Page 15 (Continued from page 14) few between. “Add to that the immense competition they are facing from Internet competitors — both in online classified advertising and alternative niche Web portals.” For many mortgage brokers and loan originators, “this is a heavy struggle. “Then the idea struck us heavy: What if we became the trusted Internet partner of the newspaper industry with the sole focus to help them compete and win against online competitors?” All the news … “For the mortgage industry, this allows a mortgage broker to get access to consumers at the initial decision point — when they are looking for a property to refinance,” Perry said. “When users view their newspaper’s online real estate ads, they will also be presented with the option to ‘look for financing’ — enabling the mortgage industry to have access to both financing and refinancing leads. “CaptiveLeads is more than just a point solution. By creating a national network of contributing newspapers, a mortgage broker has access to not only local leads, but leads in every market they service. “Our partnership with newspapers is an advantage to us, as we provide this service exclusive to them. “However, in the mortgage industry we compete with online entities such as ELoan, Lending Tree and other national direct players that advertise to consumers aggressively.” Match point Not only does the Web site increase qualified local sales leads from traditional classified advertising in newspapers, but it reportedly simultaneously accesses leads in the “red hot” online classified advertising marketplace. Statistics from CaptiveLeads.com show 75 percent of homebuyers begin their search for properties on the Web, while 53 percent use the Internet frequently as part of their search process. allows prospective buyers to requests information regarding mortgages and real estate representation.” CaptiveLeads.com “puts the consumer in direct contact with the sales representative or mortgage broker, thus expediting the purchasing process,” he said. “And consumers who use the Internet to search for homes are more likely to use a real estate agent than those who didn’t use the Internet.” “The qualified sales leads our Web service captures also covers the coveted ‘power purchasers’ in the 18to 34-year-old demographic sector. But this doesn’t discount baby boomers, prime targets for the refi industry. “For mortgage brokers and real estate agents there are no up-front costs or long-term obligations for using the service. You simply review and purchase consumer leads right for you. It’s that simple.” BestInMortgage.com, on the other hand, connects borrowers directly with mortgage originators. “Unlike other lead providers servicing the origination industry, BestInMortgage.com acts as a matchmaker by allowing potential borrowers to interact with originators before committing to the loan process,” Itkis said. The concept for BestMortgage.com was hatched after a survey of mortgage originators found more than 90 percent of respondents rated their own Web sites as being either mildly effective or not effective at all. “We realize that there is currently a gap on the Web between potential borrowers and loan originators,” Itkis said. “The online lead providers are steering potential borrowers away from individual originator Web sites,” he said. (Continued on page 16) “The Web service’s advanced search capabilities will allow the mortgage and real estate industries to select prospective consumers both demographically and geographically,” Perry said. Early success In its first month of operation, “the response to the business model has been phenomenal,” he said. “Since the site has gone live, we’ve had 325,000 hits. “The response from the ‘lead purchasing’ industry has also been fantastic. We have cities lined up and ready to go as soon as we pull local newspapers on board. “We find ourselves in a good, but challenging position of helping a very successful, but legacy industry (newspapers) bridge the online value gap, while keeping a technology experienced industry (mortgage) interested while we bring newspapers online. Jeremy Cowdrey, vice president of BuyLookSell, also weighed in. “By purchasing access to leads taken from our Web service, mortgage and real estate brokers can tap into continuous and qualified local sales leads,” Cowdrey said. “Our service LANDING LEADS Page 16 (Continued from page 15) “This forces the originators to purchase leads and makes the loan shopping process less personal for the borrower.” BestInMortgage expects to narrow this gap by providing a neutral forum for borrowers to ask candid questions without having to disclose their personal information, allowing borrowers to evaluate their originator before making contact. “The online lead providers face a rising rate environment,” he said. “We are seeing a new market segment of borrowers who are seeing their monthly ARM payments increasing. These people will be looking for more than a good rate the second time around — and will need sound mortgage advice from a trusted adviser.” Global Branch Solutions has a better idea, according to Mitch Freifeld, its president. This Clearwater, Fla.-based brokerage company is one of the nation’s top five net branch organizations with more than 4,000 brokers and 400 branches, closing $5 billion in loans through Ellie Mae’s Encompass Mortgage Automation System. “Each of our brokers gets 100 leads per month,” Freifeld said. Does he ever worry about running out of leads? “Not at all,” said Freifeld. “I’ve been doing this since 1989. It’s a wild, wild West, out there. “I’m constantly looking for new lead sources. My suggestion for brokers are if someone contacts you, do your due diligence, ask for three to six references from the companies who used the service — and ask for a list of statistics to show how many of these leads actually closed.” Personality counts “One of the biggest things I look for is cooperation,” Freifeld said. “I can tell in their voices if I want to do business with them or not.” He also asks a potential new lead source to send five or six leads that Global Solutions could try out. “If not, I’m not willing to do business with them,” he said. Many companies have court checkers posted at courthouses all over the country pouring over property records, looking up two-year adjustable rate mortgages. “They are just sitting at the courthouse with their little pens to get names, phone numbers, parcel numbers,” Freifeld said. “Each lead costs from 16 cents to $90. I’ve learned the more expensive the lead, the worse it is. “The reputable companies will either trade bad leads for good leads or give back your money.” Also, brokers who attend seminars which sell “exclusive” leads should know that those leads are no different than anybody else’s, Freifeld said. Lending Tree will go to four different brokers to do a loan, he said. The one who gets to the borrower the quickest, gets the loan, he said. Mortgage brokers need to know there are more Web sites than ever to go fishing for leads. And the smart fisherman knows where to find the hidden pond with the biggest fish to grow his business. LANDING LEADS Page 17 Burned by Internet leads, mortgage brokers turn to voice technology Forget donuts — a new generation of mortgage broker is breaking down Realtors’ doors armed with leads in place of gifts. Across the country, brokers are pitching voice technologies to real estate partners to help them sell homes and to scoop up the lendinglead-pay dirt. VoicePad is an early mover in the mortgage industry’s shift towards voicegenerated leads. As reported in February, the Internet has taken realtime lead prospecting to new levels, with mortgage vendors scrambling to out speed-dial each other in the race to close e-generated leads. But pure Internet leads are far from perfect. After a prospect clicks “submit,” they can change their mind or they may be hard to get on the phone. Once a prospect has given their details over the Web, they may be harried by multiple mortgage brokers chasing their business. They become reluctant to opt-in again, and they warn their friends. Enter voice technology. Smooth-talking proponents of voice generated leads claim closing rates two to three times higher than Internet leads. Chris Consorte, CEO of Integrated Interactive, said his company has been delivering Internet leads to its mortgage client base for six years, but predicts that the practice will be sidelined by newer, more integrated technologies. “We’ve pioneered live transfers, which are very hot right now,” Consorte said. “Our call centers go out and get interested parties on the phone, then conference call in the mortgage company. We have a very high success rate.” The telemarketers cold call and follow leads scoured largely from the Internet. Integrated Interactive is testing fresher models like the pay-per-call concept mastered elsewhere by Telmetrics, Ingenio and VoiceStar. These companies track advertising success rates by creating unique phone numbers or touch-tone product codes. VoiceStar is America’s leading provider of pay-per-call advertising services, and its 800 mortgage clients buy inbound telephone leads for around $30 a piece. According to President Ari Jacoby, the average conversion rate is higher than 10 percent. Arch Telecom specializes in sales lead generation products for the mortgage industry. Their services include toll-free numbers directing consumers to multiple recorded messages as well live-person connection and data capture. Pro-quest Technology is another leader in phone-based mortgage lead generation. By encouraging borrowers to call the mortgage company, rather than vice versa, and by routing their calls based on the online or traditional advertisement to which they’re responding, companies like VoiceStar and Integrated Interactive are blending oldschool personal selling with cutting edge adtracking and Internet marketing. Ad tracking provides quantifiable data on advertising success rates, and sets up pay-per-call advertising models in the cut of established online pay-per-click approaches. “It’s different because it’s a real time phone connection,” Consorte said. “(The broker) picks up the phone and gets connected directly to the client. It’s a real time enquiry versus an Internet enquiry, when it’s very difficult to get someone on the phone. An inbound phone call is three times more likely to close as even the freshest mortgage lead (from the Internet).” Integrated Interactive plans to launch their inbound ad-tracking service within six months. Like VoicePad, it enjoys an early mover advantage in a space that is, for now, relatively uncongested. VoicePad has been five years in the making, and since it opened for business two years ago, it has taken over home state Kentucky, spreading outward with uptake in bilingual Miami and big contracts signed from Florida to California and, most recently, with Fifth Third Mortgage in Chicago. LANDING LEADS Page 18 Voice technology, Part II: Lead system brings brokers, Realtors together In the first part of this series, the article addressed the shift to phone-based lead generation and conversion products taking place in the mortgage industry. One such product is VoicePad, an automated real estate inbound telephone sales system. Real estate agents use VoicePad’s web-interface checkboxes to describe a property’s features and price, and they choose from stock-standard superlatives like “alluring,” “conveniently located” and “pet friendly.” The property description and price is recorded in English and Spanish. Homebuyers call a local number from a for sale sign or real estate ad, and key in the property code. The property is described, a repayment estimate is given, and callers can be directed to a real estate or mortgage broker. Ninetyseven percent of callers allow their phone numbers to be captured in exchange for immediate property and price information, and to avoid a real estate pitch. The lead is split between the real estate agent and the mortgage broker. Real estate agents seem to love the system. John Fishbach, a Louisville, Ky., Re/Max Realtor, says it impresses potential sellers, provides valuable activity tracking, and saves money and time refilling flyers pinched from bleacher boxes by “neighbors and nosey kids.” The percentage of callers that drop off when the price is revealed offers quantifiable pricing feedback. Mortgage brokers buy bulk licenses and sell or give them to real estate agents. Whether callers like a property or not, one thing is for sure: They’re looking to buy, and this makes them a high-quality mortgage lead. The lead is shared between the real estate agent and the mortgage broker. Rodney Davidson, sales manager for Wells Fargo Louisville, said that leads are the No. 1 asset real estate agents want from their mortgage partners. “This system allows me to send qualified leads to my real estate partners on a consistent basis every single week,” he said. He claims the system guarantees him a sit-down appointment with virtually any real estate agent. “Real estate agents already have lending relationships set up,” he said. “When I walk up to them I say ‘Fine, I don’t want to interfere with that, I want to help you sell more homes.’ The bottom line is, it doesn’t matter if they use me or not because I still have control of the leads and I can convert them to loans. But I’m so confident that once they see how it works and I start sending them business, they’re going to want to do business with me and send it back. I’m going to earn their trust and therefore their business.” VoicePad, like any other phone-based marketing system, carries manageable legal risks. “As we work with our mortgage partners and real estate professionals, we emphasize the need to follow their standard no-call-list scrubbing procedures,” said VoicePad CEO Randall Standard. “Although we confirm the caller’s agreement to a follow up call … (agents and brokers) are personally responsible for no-call list and RESPA violations.” National ‘do not call’ legislation, introduced by Dr. Howard Beales in 2003 as director of the Federal Trade Commission's Bureau of Consumer Protection, exposes errant brokers to $11,000 fines for every illegal call they place to any of the hundred million numbers on the list. Beales said the legislation is good for industry as well as consumers. “About a quarter of the people on the list have seen no calls at all,” he said. “And there are reports that calls are more successful.” Buchalter Nemer shareholder and former assistant attorney general from Missouri Clay Friedman specializes in do-not-call legislation. According to Friedman, brokers need to consider whether they are placing cold calls or whether their phone call fits into an exemption. Exemptions exist when the broker has done business with the consumer in the past 18 months or when they've been contacted directly by the consumer in the past 90 days. Exemptions are also available if the consumer has authorized the broker to contact them. Consumers don’t implicitly authorize a broker to contact them just by authorizing another professional to do the same. If the broker is placing a cold call, the phone number must be scrubbed against the do not call list, which is to be downloaded at least once every 31 days from https://telemarketing. donotcall.gov. Brokers need to implement procedures and training to ensure their staff don’t call the wrong numbers. And Friedman said they need to be wary of shysters hawking techniques claimed to circumvent the legislation. If somebody is selling such a system, Friedman said, "there's an extraordinary likelihood that they're lying." By legally incorporating voice leads into their business, brokers are set to enjoy higher conversion rates as sophistical technology comes online to complement straight-out telemarketing and Internet lead generation. LANDING LEADS Page 19 Using technology to drive sales: The future is now What do a software solutions firm, a television ad campaign writer and an online property search Web site have in common? The answer is: The business gurus heading up Dovarri, Target TV and REIData’s Property Profiles have proven that necessity — as well as creativity and technology — are the mother and father of Invention. While all three companies have different programs and strategies, all share the common goal of making the mortgage broker smarter, faster and more successful. Dovarri does it better The Italian word “dovarri,” looselytranslated as the English equivalent of ASAP, is a name befitting the Houstonbased software solutions firm which specializes in growing leads and closing sales for mortgage brokers, loan originators and virtually anyone in sales and marketing. Self-made businessman Geary G. Broadnax started Dovarri in 1993, gradually crafting it into a sophisticated officer organizer and sales primer, which delivers customer data to sales professionals where they need it the most — the field. “We are not a data collector, but a sales enabler to help sales people close deals,” Broadnax told Broker Newswire. “We have very few competitors. “Dovarri assists brokers by organizing their processes and storing client and customer information into its software, thus organizing pertinent information and keeping them focused on what they have to do next — always keeping their eye on the ultimate goal,” he said. Goin’ fishing The software solutions company allows mortgage brokers and anyone in sales to prospect, qualify and close deals via mobile or desktop devices — with or without Internet access. Unlike many Web-based software solutions, Dovarri actually hands its subscribers a pole so they can fish for leads online, too. “Dovarri actually walks the client through a process,” Broadnax said. “It isn’t just about tracking data, but reinforcing good business sales processes. Whatever company we are working with, the methodology is built right into the software, enabling the client-user to gains expertise in winning and succeeding when he goes out in the field.” One Texas business owner, who asked for anonymity, reported a 44 percent increase in sales closings less than a year after signing onto Dovarri. This enabled him to cut his office staff from 18 to five people. Doing more with less Broadnax boasts of running Dovarri with just 14 employees in the Houston headquarters, 12 in its California office and 40 programmers based in India. “I believe 1,000 percent in outsourcing,” Broadnax said. “I don’t believe in hiring many people. I’d rather go outside and bring expertise in from various areas of the country and foreign countries.” Broadnax recently offered Dovarri’s current clients a new marketing module called imarket, an e-mail mining module — for free. (Continued on page 20) LANDING LEADS Page 20 (Continued from page 19) “Most folks don’t know how many people actually receive their e-mail inquiries — or know which companies responded first or not at all,” he said. The i’s have it “The imarket module tells you when e-mails and attachments are open and tracks their progress, thus providing an e-mail trail called intelligent prospecting,” Broadnax said. “Without imarket, you could send out 50 e-mails and not know who to call back. “But with imarket, you learn who received and opened e-mail messages first — and who never received them,” he said. “It saves a lot of time, and people just love it.” Broadnax declined to divulge the current number of Dovarri’s clients. Direct TV “In spite of rising Internet use and direct snail mail efforts, television is still the primary media for generating highquality leads,” Seroka said. “You can have a very successful business online, but for mortgage companies striving to build business and their brand, it’s necessary to go outside the Internet and inside consumers’ homes. “TV is the ideal partner,” he said. “Direct response TV (DRTV), carefully crafted and appropriately placed, offers the greatest potential to generate traffic and bring in the highest volume of qualified leads. “We are utilizing TV as a lead generating tool,” he added. How it works Seroka scripts, directs and produces the television commercials, designed to compel viewers to call a phone number posted on the screen. He also analyzes competitors’ TV ads, figures how much they are spending on advertising, identifies the best-performing markets and determines the most appropriate programming to reach the client’s target audience. He then monitors the client’s ongoing campaign, using a specific call-capture and analysis technology to maintain peak performance. Not unlike a political campaign manager, Seroka attempts to counteract the competition’s message for his client in order to appeal to John and Jane Public watching TV in their living room. Timing is everything “While the initial campaign is rolling, we take new steps to develop a more integrated plan,” Seroka said. “This isn’t just about purchasing tonnage or a whole lot of inexpensive media time. Companies come to our company (Continued on page 21) advertising firm has been promoting the advantages of its Target TV process to lenders who use television as a direct response vehicle for promoting their mortgage programs. Offered exclusively by Seroka & Associates, Target TV uses “Let’s just say we are growing very fast,” “sophisticated media-search and optimal time placement techniques to reach the he said. audience most likely to respond to television ads promoting non-prime All in a name “In my last company, I hired a marketing refinancing or second mortgages,” firm for $80,000 to come up with a name Seroka said. “It’s a scientific approach used successfully in other industries, — and it came up with Bubbanet and Fishnet,” Broadnax said. “This last time I leading to a positive ROI. gathered four of my best friends into a conference room with three six packs of “Target TV is new to the mortgage beer and announced we would not leave industry, but television ads have been extremely successful in other industries until we came up with a name. which require people to make a considered purchase instead of an “One guy, who was of Italian descent, came up with ‘dovarri’ which he said was impulse buy. a word that meant, ‘I need it now.’ I immediately liked it,” he said. “And it only “When consumers look for a mortgage loan, they need time to mull it over. cost me three six-packs.” There are a lot of media companies out there — but they can’t market a TV generation John Seroka, vice president of Seroka & mortgage like it was a ginsu knife, for Associates, headquartered in Waukesha, instance.” Wis., launched Target TV in February. The public relations, marketing and LANDING LEADS Page 21 (Continued from page 20) expecting we know what we are doing.” Seroka is looking forward to April — the start of the busiest season for brokers, bankers and builders. “During the hot spring market, people want build-outs on homes, new kitchens and many couples are eager to move to new homes before their kids start school in the fall,” he said. “Television can be an important part of any mortgage company’s marketing mix — if it’s done correctly. The proven, precise strategy of Target TV reinforces online efforts, builds the brand and ensures that marketing efforts reap maximum results.” Search savvy Launched in October 2005, REIdata’s Property Profiles research tool offers nationwide detailed residential real estate information, meeting the analysis needs of mortgage brokers, real estate agents, MLS’s and title industries. Robert Alcala, REIData senior vice president, says Houston-headquartered Property Profiles provides real estate professionals immediate and extensive information useful to understanding a property’s make-up and unique characteristics. “Property Profiles provides rich information by first simplifying the research process by tapping into a multitude of data providers, pulling together clean, useful data and compiling it into an easy-to-use report,” Alcala told Broker Newswire. “It offers one of the most complete sources of information to real estate professionals online — in any location. “We manage data in 48 states and more than 1,400 jurisdictions,” he said. “Within that footprint, we cover 86 percent of the top 300 counties in America — on par with our competition.” Pulling from many data sources, the Mission possible: master report has been enhanced with CMA, school information, demographics, businesses, flood data, subdivision statistics, property photos, aerial imagery, street maps and parcel maps. In addition to a basic search, subscribers can utilize Advance Search criteria to more specifically maximize their searches, Alcala said. Specific searches can include location, general property characteristics, mortgage data and amount, sale date, land value, acreage and other criteria. “We have products and services designed for mortgage brokers and MLS professionals and tools to allow them to market to new home buyers, movers, renters and investors,” he said. “You can go to our site at www.propertyinfo.com, click on a ZIP code and get a listing of all properties that fit a certain criteria.” However, information a customer receives from Property Profiles is as current as the public records where it captures the data, he said. “We, as a company, understand that data and information drives work in this industry,” Alcala said. “Our goal is to get this data into those marketplaces that best fulfill the solutions needed. Our mission is to be a leader of online property information.” All three companies have something to prove in 2006. We’ll see how they do. Smart solutions for building quality leads Packed among the tidbits of wisdom you picked up from your high school gym teacher is a piece of advice that can mean the difference between success and failure in today’s tightening lending market: “Work smarter, not harder.” With would-be borrowers no longer walking in the door in droves, it is up to brokers to get savvier about finding the market niches that do need their services. Fortunately, companies have stepped in with data technology tools that make finding quality leads that match a particular lender’s programs both easier and more effective. With the ability to pull data from a wide range of sources and the IT knowledge to build useable databases, these companies can provide brokers with an arsenal of businessbuilding tools. A name isn’t enough Going out with a generic mailing to all the homeowners in a certain ZIP code might have yielded enough leads to (Continued on page 22) LANDING LEADS Page 22 (Continued from page 21) make it worthwhile in the past, but that’s not the case in today’s market. Nevertheless, said Fidelity National Data Services Vice President Brian Mushaney, that doesn’t mean that there aren’t plenty of market groupings worth reaching out to. For example, Mushaney said, many borrowers are about to see their monthly mortgage payments skyrocket as their adjustable rate mortgages move out of the initial teaser rates. Those borrowers are prime candidates for refinancing, whether they are your customers or whether they are being serviced by a competitor. Using a tool such as Fidelity’s SiteXdata, a broker could generate a mailing list of borrowers in their target market who are within 60 days of seeing their rates adjust. Or, a broker could use SiteXdata to search their own portfolio to see which borrowers may be in line for a huge adjustment. Time is of the essence, said Ron Tateman, executive vice president of Licensing and Reseller Solutions at The First American Corp. “In declining markets where interest rates are rising, activity slows. Now it becomes a game of identifying just those few who are going to make a move and making sure you’ve got a leg up and make the first move,” he said. Have it your way The range of data parameters brokers can choose from is truly dizzying. Credit Plus Inc. offers leads that combine real estate data with credit data from two of the three largest credit repositories in order to give brokers access to lists of would-be borrowers who are most likely to use a lender’s services. For example, said Todd Zuerlein, regional marketing representative for Credit Plus, if you are marketing a subprime loan, you don’t want to spend money mailing information to consumers with credit scores of 680 or 700. SiteXdata can provide a list by type of mortgage, loan amount, property characteristics, loan origination period, and many more variables. The ability to pinpoint a certain kind of borrower is key for those who focus on a small, niche market. Mushaney gave the example of one customer, a San Diego-based mortgage broker who only does mortgages worth at least $800,000, typically refinancing properties worth $1 million or more. Each month, he pulls 5,000 records out of SiteXdata that fit his parameters. That original list is then enhanced and refined down to about 500 customers. Working from that highly-targeted list, Mushaney said, the broker is able to close five deals a month, a healthy business for a one-man shop. Pump it up Tateman explained that through a range of products, First American can provide brokers with lists of customers based on parameters like the date sold, whether the mortgage is through a subprime lender or a specific competitor, if a property is in foreclosure or is distressed. Brokers might also choose to market to a list of owners or properties held in trust or individuals who own multiple parcels. On top of those services, First American offers “high-end” predictive modeling and scoring options that can analyze a list and tell a broker the probability that someone on it would get a new mortgage, refinance, or take a cash-out refinancing. A fourth model helps identify buyers who have been given a subprime rate but who would most likely qualify for better terms, Tateman said. What’s in it for you? While results of course vary from customer to customer, Mushaney gave the example of a Fidelity customer who mails 250,000 pieces a month based on lists from SiteXdata. That customer has 50 loan officers on staff and is able to (Continued on page 23) Melissa Data’s marketing manager, Jack Schember, said one of his company’s most popular lists at the moment is its absentee homeowner list, which brokers are finding fertile ground for refinancing offers. LANDING LEADS Page 23 Mission possible, Part II: Is automated lead generation right for you? In Part I of this story, “Smart solutions for building quality leads,” Broker Newswire looked at new automated lead generation systems that offer brokers ways to work smarter, not harder. But as it was noted in the story, brokers aren’t exactly chomping at the bit to sign-on with these programs. Here in Part II, we take a look at the reasons why some brokers shy away, and how you can decide if the systems are right for you. Brokers have a variety of reasons why they may shy away from using lead generation tools. Fidelity National Data Services Vice President Brian Mushaney said he finds that while a portion of brokers just don’t know these services exist, others have more complicated reasons for hesitating to take the plunge into automated lead generation. He said that many brokers, especially those in smaller businesses, assume the services cost too much for them, and pointed out that lead generation is a matter of spending money to make Smaller companies often feel that there will be too high of a price barrier to work with a large company like First American, said Ron Tateman, executive vice president of Licensing and Reseller Solutions at The First American Corp. They may wrongly assume that its services are going to be well beyond their price range. But, he pointed out, First American has specifically designed products with price plans that facilitate pay-as-you-go and entry-level users, as well as largescale lending operations. money. For example, he said, if a broker invested $100 a month in buying lists and generated one loan a month from the list, the investment would pay for itself many times over. First American’s MortgageList.com lead generation portal offers fee-based, payas-you-go lists, making it possible to brokers of all sizes to use the service in a way that fits into their individual marketing budgets. Todd Zuerlein, regional marketing representative for Credit Plus, summed up one of the biggest sources of resistance in the broker market this way, “One of the biggest challenges is getting brokers to believe what we’re telling them.” Brokers may simply be reluctant to believe automated lead generation is (Continued on page 24) Mission possible: Smart solution for building quality leads (Continued from page 22) keep them all busy by keeping up a steady stream of direct mail. Zuerlein said his company’s customers are typically seeing response rates of “somewhere around 0.6 to 0.8 percent.” Of those, he said 50 to 60 percent can be expected to submit a loan application, with 60 percent of those applications resulting in a loan closing. That means a broker could expect to close between 22 to 26 loans after a 10,000-record campaign. Zuerlein added that with Credit Plus’ pricing structure, that closing rate would mean a return on investment of about 750 percent. Because larger orders get preferred pricing rates, smaller orders may have lowers ROI rates. For example, the ROI on a 5,000-record mailing would be closer to 430 percent. Along with its lead generation services, First American also offers a range of competitive intelligence tools, Tateman said. Brokers can go back and check on a list they marketed to and find out who did what in terms of getting a loan. The company can tell you which borrowers went with which lenders and what rate they got. With that and other postmortem information, brokers can improve both their marketing efforts and their product offerings to increase response and closing rates, he said. LANDING LEADS Page 24 lenders in the company are counted on the client lists of the two companies. And, Zuerlein said, partnering with a company like Credit Plus can level the playing field, giving midlevel and smaller lenders “similar or equal marketing campaigns to the largest lenders in the United States in a costeffective way.” DIY While some companies make it easy for brokers to pull their own lists through a Web interface, they understand that the process can be intimidating and not 100 percent foolproof. The old adage of “garbage in, garbage out” still applies. For that reason, Fidelity recommends that brokers let the company help them with their first few data pulls. That way, brokers get comfortable with the interface and don’t waste money on a list that isn’t what they really wanted. First American also provides both oneon-one support and extensive training options that help brokers make the most of its lead generation products, which include LeadsToLoans and MortgageList.com. Credit Plus provides a more hands-on process, helping brokers tease out the list that most closely meets their needs by teaming brokers with Credit Plus representatives. Zuerlein said they typically start out by asking brokers, “What kind of person would you get really excited if they called you?” By talking about their bread-and-butter customers, Credit Plus is able to design a query that will produce the most effective possible list. Try it, you might like it With back-end support available and entry-level pricing, some would argue that automated lead generation is a tool mortgage brokers can’t afford not to try out. (Continued from page 23) effective because it sounds too good to be true, or they may have had bad experiences using outside lists in the past. He noted that the market has been “watered down” by companies offering lists at 4 to 6 cents per name. While the cost is attractive, brokers most likely find out that the list they get for that price isn’t even worth a small price, he said. Brokers may also feel they don’t have the marketing know-how to make the most of an outside list. To help overcome this hurdle, Fidelity has partnered with a group of mailing houses. Once a broker gets a list, it can be delivered directly to a mail house. The broker then picks out a letter or postcard from a group of pre-designed options, and the mail house takes it from there. Credit Plus offers a similar service through a business partner, letting customers mail out a full-color, twopage direct marketing piece without having either an in-house IT or marketing team. Of course, brokers who want to handle their own mailings are free to do so. Tateman also observed that the real estate market in general can be slower to adopt technology, leaving many mortgage brokers wondering if they have the technical know-how to use Web-based products, FTP transfers and the like. His company, he noted, has worked both to make the interfaces as intuitive and easy to use as possible, as well as to offer a healthy amount of backup training and support. Is it right for you? Both Tateman and Mushaney were quick to point out that their services aren’t designed for one particular kind or size of broker — everyone from a single individual running a business out of a spare bedroom to the top five LANDING LEADS Page 25 Mission possible, Part III: Tips for maximizing existing lead lists In Part I of this story, “Smart solutions for building quality leads,” Broker Newswire looked at new automated lead generation systems that offer brokers ways to work smarter, not harder. In Part II, "Is automated lead generation right for you?” it examined the reasons why some brokers shy away from these systems, and shared tips on how to decide if they are right for you. But here in Part III, the publication will take a look at how brokers can get the most out of data they already have. Clean means green Building new business doesn’t have to mean buying or renting a list of new names. In many cases, there is money to be made from a broker’s existing list (or at least not wasted), provided it can be enhanced with outside data or cleaned up to eliminate dirty data. Todd Zuerlein, regional marketing representative for Credit Plus, explained how credit data can be the key to finding new business inside your own database. For example, he said, you could use Credit Plus’ data to pull out a list off all your customers who have taken on a second mortgage that might be combined into a single mortgage. Or, you might want to find out which of your customers have improved their credit scores enough that they would be able to move from a subprime to a conforming loan. That information could be the basis of a very attractive marketing pitch. Through its Realist and RealQuest research tools, said Ron Tateman, executive vice president of Licensing and Reseller Solutions at The First American Corp., brokers can make the most of both in-house and rented or purchased lists by adding property profile reports, comparable analysis reports, automated valuations, flood maps and more. Fidelity National Data Services Vice President Brian Mushaney explained that his company can take a broker’s existing database and enhance it to tell a broker whether the owner still lives there, what the current mortgage status is, how much equity exists in the home and dozens of other parameters. He said that any piece of data that can be included in list can be added to enhance a broker’s database, all of which can help a broker make sure their customers aren’t poached by other lenders and are offered refinancing when it is appropriate. If it’s worth doing, it’s worth doing right Jack Schember, marketing manager for Melissa Data, said that effective marketing begins with a list that isn’t just targeted and pre-qualified; it has to be clean. For example, he said, more than 40 million people move each year. If your database isn’t keeping up with changes like those, you could be wasting your money on sending mail to people who aren’t there to get it. Brokers can send their lists to Melissa Data to be updated against the National Change of Address (NCOA) database, updated with correct ZIP codes, or be CASS (Coding Accuracy Support System) certified, which ensures through the U.S. Postal Service that databases contain correct addresses and qualifies senders for discounted mailing rates. Smarter than a hog Schember pointed out that while the Internet has been a powerful tool to connect would-be borrowers with (Continued on page 26) LANDING LEADS Page 26 Sparking new leads: Four ways to set your sales on fire When Greg Frost asked a sea of 272 loan officers if any were natural-born salesmen, no one raised a hand. “If you’re not, you know it,” he said. “You know people like that, don’t you? You know those people that can sell ice to Eskimos? Natural-born salesmen do things automatically. They have a process they fall into. But (selling) doesn’t come naturally to lots of people. That’s why I’m here.” Frost, a loan guru from Albuquerque, N.M., and conference partner, David Bartels, revealed their “million-dollar” selling techniques to a room full of loan origination professionals during a recent High Performance Strategies training seminar in Cleveland, Ohio. Frost, credited as being the first billiondollar loan originator in the country, started the day by offering up eight strategies for “finding people to sell.” The first four are highlighted below. “Who are the customers?” he asked. “Where are they? How do I find them?” Lasso in first-time homebuyers “Did you know last year 45 percent of all homes in the country were purchased by first-time homebuyers?” Frost asked. “Are you aware that every year that number is 40 percent or more? It never drops below 40 percent. That’s a huge market.” Frost said he chooses first-time homebuyers because he “knows more than they do.” “You have all these investors and flippers coming out of investor classes that probably know more than I do,” he said. “But for first-time homebuyers, I probably look pretty smart to these people.” Statistics also suggest that borrowers will buy five houses and take out seven mortgages in their lifetime. First-time homebuyers, to Frost, are also potential lifetime clients. “If I get someone in their first house, I’ve got six more deals if I’m smart,” he said. To find them, Frost suggests conducting first-time homebuyer seminars once a month, except December when, Frost says “no one likes to work and no one will come.” He conducts the seminars alone, but does say he would consider a joint venture with an appraiser. “I don’t do it with a Realtor,” he said. “I want all the leads for myself and then disperse them to a few Realtors (I’m working with).” Frost disperses about 20-40 leads and ends up closing 4-6 loans every month with this system. (Continued on page 27) Mission possible III: Tips for maximizing existing lead lists (Continued from page 25) brokers, the growth of online data entry has created its own set of problems. Put simply, Schember said, “The growth of online data entry has increased the problems of false data.” While a person would easily recognize that Mao Tse-tung is unlikely to need to refinance a loan on a duplex in Indianapolis, a computer will enter that useless information into your database unless it is programmed not to. Using Melissa Data’s Address Object, brokers can make sure information is verified when it is entered from the Web. Address Object will correct bad data input, standardizing addresses to USPS parameters, and adding ZIP plus four codes. Whether it is digging deeper into your database or rooting out the dirt among the data, brokers can choose from a number of tools that will make their marketing efforts both more effective and more affordable. LANDING LEADS Page 27 (Continued from page 26) Befriend Realtors To Frost, Realtors are more than just a source of referrals. “Realtors have listings. Buyers buy these listings. Buyers need mortgages,” he said. He encouraged LOs to meet one-onone with all of the Realtors they currently work with and ask their permission to pre-approve their sellers. “These Realtors have sellers. These sellers are going to sell their houses and when they sell their houses they’re going to need to borrow money (to buy another house),” he said. “Even better than that, get them pre-approved, have their loan in process right now and be ready when you sell their house to be their mortgage resource.” He also stressed the use of Realtor listings as bait to find homebuyers. His company buys a two-page ad in a homes listing magazine that offers an audio tour of a featured home. “They flip through the magazine (left to right) but when they come to my ad, they have to (turn the magazine),” he said. “They have to put the magazine down to look and they’ll call.” Frost then uses a call-capture system to catch the name and telephone number and acquire leads. “So I get someone calling who’s interested in a free audio tour of the house for sale,” he said. “If they stay on the line for two seconds, I get their name and telephone number 82 percent of the time. “We call them back and enter into a relationship with them early on in their house searching process, before they make a relationship with a lender, before they make a relationship with a Realtor. We try to snag them up and refer them to the Realtor’s listing they talk to as many people as I can who want to borrow money. I don’t care if they qualify or not. That’s my job. But I can’t qualify anybody if I don’t know who wants to borrow money.” Frost says his company closes 4-6 loans a month from people who are selling their house. FSBO sellers need a mortgage “FSBO (for sale by owner) sellers need you, they just don’t know it,” Frost said. “Half of them don’t know what they are doing. They think they are saving money. You’re not saving any money unless you’re selling your house, right?” Frost sends sellers a mailer each week. “(The first week) it will be ‘33 Ways to Sell Your Home Fast’ and I’ll send it out with a little introduction letter,” he said. “The next week I send them ‘11 Mistakes Most Sellers Make’ and I make a phone call. The next week I send them a FSBO check list.” Frost waits 3-4 weeks to see if the seller has closed a deal. If they haven’t, he offers marketing assistance which includes a spot on his FSBO Web site, a FSBO sign in their yard and 25 flyers in the sign tube. “Then I have this agreement,” he said. “I say, ‘You know, we do all this for you, and it’s all free. All we need to do to get the program started is schedule you for your loan application appointment.’ That’s the piece most people are missing when they are out there working on FSBOs. “So they sign this and sometimes they don’t make their appointment. If they don’t make their appointment, that sign disappears the next day out of their yard and I take the house off the Internet.” Frost said he closes 3-4 loans per month using this process. called on.” Frost said his company spends about $3,000 a month on the hotline and ads, and closes about eight loans per month using this technique. Who needs a mortgage in 60-120 days? People who need a loan in 60-120 days are the ones with the “for sale” sign in their yard, Frost said. “The sign to you doesn’t say ‘house for sale.’ It says ‘I’m gonna need a loan,’” he said. “These people are going to need a mortgage as soon as the Realtor sells their house.” Frost and his company have devised a ‘just-listed’ marketing campaign consisting of five letters and five telemarketing scripts. Frost picks 50 houses each week he wants to market to, sends out a letter and then follows up with a marketing call. “We begin a relationship with the sellers early,” he said. “The thing is, we want to get to them before the Realtors do. “What I want to do every single day is LANDING LEADS Page 28 Sparking new leads, Part II: Striking while the iron’s hot Greg Frost, a loan guru from Albuquerque, N.M., recently revealed his “million-dollar” selling techniques to 272 loan origination professionals during a High Performance Strategies training seminar in Cleveland, Ohio. Frost, credited as being the first billiondollar loan originator in the country, started the day by offering up eight strategies for “finding people to sell.” The first four ideas were featured in “Sparking new leads: Four ways to set your sales on fire,” and included lassoing first-time homebuyers, befriending Realtors, and establishing relationships with home sellers and FSBOs. lending are less competition, less rate driven, fewer regulations and the need,” he said. “It creates another profit builder for me. I like to go where the other guys aren’t. I like to make a few bucks in an area where other people aren’t so proficient in. By being able to make small commercial loans, we’ve been able to become proficient in that area.” Frost recommends using Interbay for these types of loans. “As the people who originated this loan — we made the transaction, we are the people they trust and who they like — we stop communicating with them at the most important time.” To combat loss of communication, Frost devises a co-branding marketing campaign involving himself and a Realtor who referred the loan. “I let the Realtor know ‘I’m going to mention your name on every marketing piece that I send out,’” he said. “For the next three years, I have a series of automated marketing campaigns that are coming from me and my Realtor.” Frost sends cookie tins to his past clients as well as birthday and Thanksgiving cards and a satisfaction survey — all bearing his picture and his Realtor’s picture. This system, he said, creates an excellent referral relationship with the Realtor. “Separate yourself from the crowd and put a copy of all the campaign mailings in your Realtor presentation book,” he said. “When you are talking to potential Realtors, they’ll be blown away by this.” Frost and his company establish four new Realtor relationships every month and close three new loans per originator. “The people you just made a loan to don’t remember you 30 days after the transaction,” he said. “They don’t remember their real estate agent, they don’t remember their Realtor, and they don’t remember you. It’s up to us to keep up mind awareness and we can keep up mind awareness by keeping in touch with them on a regular basis.” “They provide us with great information, education, training, personnel, marketing and sales for my team,” he said. “Interbay is a lot like a residential loan. You’ve got to take your great 1003 and you’ve got to have a great appraisal. If you pick up one every other month, you Here, Frost unveils the last four strategies involved in his lead generation can make some extra money.” plan of attack. Gather leads from the Web Frost said he has a great day every day Sell the seller After you get the purchase agreement for due to his free report Web site, which he the buyer you are servicing, Frost urges dubs the “ugliest Web site in the world.” LOs to call the seller. “There are titles here that people are very interested in,” he said, “Seven “Say, ‘I’m working on this transaction. I just want to let you know it’s moving right Questions Mortgage Lenders Hate,’ ‘Four Steps to Buying a Home with Zero along. By the way, are you going to be Down.’ People come in and they want to buying a new house? Yes? Can I help see these reports but every time they you with your financing?’” want (one), they have to enter their email address or their telephone number.” If the seller says no, he sends them a letter with his resume and calls them Frost and his company generate about again. 50 leads a month using the site and close about four loans. “Sometimes they say yes,” he said. Go where other guys aren’t Small commercial lending, Frost said, is relatively uncharted territory, although many are itching to make big bucks in this segment of lending. “The reasons I like the small commercial There’s gold in your closed loan files “We work so hard to find a lead,” Frost said. “We work so hard to process the loan so, at the end of the process, the customers still like us. And then we write out a check for $150,000 and we kiss them off. LANDING LEADS Page 29 Sparking new leads, Part III: Refining your selling strategy The No. 1 question borrowers have when shopping for a loan has nothing to do with the interest rate. According to mortgage banker David Bartels, it’s not even about the monthly payments or terms. “More important than anything, they ask, ‘Can I trust you to help me with the biggest financial transaction I’m ever going to make?’ They need to know they can trust you,” he said. During a High Performance Strategies seminar in Cleveland, Ohio, Bartels outlined how to secure loan applications from generated leads by building rapport with clients. “When you start asking the most critical questions,” he said, “you start asking about job, income, credit, how is the communication? Does it slow down a little bit? Why do you suppose that’s happening? Because they don’t know you. They don’t trust you.” Bartels emphasized that loan officers see getting the loan application as the beginning of the loan process where as borrowers see it as the closing question, and are afraid to commit before they shop around. “We might as well be asking what color their underwear is,” Bartels said. “They don’t want to answer those intimatetype questions until they’ve developed a level of trust.” That’s why, according to Bartels, 75 percent of leads never turn into loan applications. Even if they do establish a minor level of trust, borrowers will still tend to verify with another loan officer. “Here’s the problem for you. The loan officer who answers the borrower’s last question, closes the loan,” Bartels said. “So if they start with you and they think you might be the right choice but they’re just not sure, they’ll click or call on somebody else who answers the last question, and you lose. You’ve got to eliminate the borrower’s need to validate the information so that means you have to establish the trust by initial contact.” Bartels’ secret? “When the borrower asks the rate question, answer the trust question,” he said. “The deeper you go into the selling process, the greater the odds are that you are going to close the loan.” (Continued on page 30) LANDING LEADS Page 30 (Continued from page 29) Technology tackles tradition “The traditional selling process was established 50 years ago,” Bartels said. “It worked beautifully until how people bought products changed. The difference today is information. If you Google the word ‘mortgage,’ there are more than 350 million returns. There is no shortage of mortgage information. If you don’t serve the borrower deeper information, it’s too easy to click or call on someone else to get that information. Withholding information is no longer your friend. Withholding information increases the borrower’s anxiety.” According to Bartels, the traditional selling process is a four-step process that starts with a greeting then a prequalification which asks, “What does the borrower want? Why do they want it? Are they qualified to get it?” “Borrowers usually have no problem telling you want they want and when they want it but when it gets into the job, income, credit questions, they resist a little,” he said. Then LOs quote options. “This is where you need to know your products. You need to fill your tool box with people who will help you say yes,” he said. “Then you close. However, as loan officers, if borrowers don’t adapt to the way you sell, you’ve got to adapt to the way they buy.” Going deep Bartels introduced his “Selling Smarter” process, which starts with a greeting but then goes deep into the buyer profile as opposed to the traditional prequalification step. “The first two questions are the same — what do they want and why do they want it. But instead of asking the resistance-creating questions, job, income, credit, focus instead on getting the buyer emotionally involved,” he said. “How are they going to feel when they get the loan? Ask, ‘What is causing you to uproot your family from one part of town and replant somewhere else?’ It can be anything, right? Better schools, shorter commute, maybe they got a bigger promotion, maybe Grandma’s coming to live with them. Who knows what the reason is. “The bottom line is, they aren’t going to go through the pain of moving their family across town, across the country, unless there’s something going on and we need to find out what it is. They are refinancing for $50,000. Refinancing for $50,000 is not what they want. Why do they want to refinance? Do they want a pool? How are they going to feel when they have the pool and their kids are playing in there and they are inviting people over? It’s the feeling, not the objective.” After the profile has been established, the LOS then presents figures using average interest rates. “I know that borrower wants information and I’ve going to sell the borrower that information because selling is serving,” Bartels said. Seeing the average rates, the borrower might want to know what their specific rates will be and that’s when LOs can ask the more intimate questions about the job, income and credit. Bartels also wants to give borrowers options. “I show (borrowers) loans I know they are going to say no to because saying no empowers them to make a more clear ‘yes’ answer,” Bartels said. “Don’t tell the customer what they need. Let them decide. “(After they determine what terms they want) then we get the qualifications and close the loan,” Bartels said. “It’s about controlling the process, not the customer. “Because, after all, isn’t trust the answer to the question?” he asked. “Trust is what gets you the 1003 without even asking for it.”