The Mortgagor Marketer

Source contraints related to mortgage marketing lists (mailing and telemarketing).

Brokers I often speak to want 'ARM' leads and they will go to any length to obtain them.  The problem is that the data that you can gather through courthouse compilers can give the date of origination without a problem.  When it comes to the note rider specifics though, no database collects this information because is not commercially compiled. 

The reason nationwide compilers can do even the origination date is that the data is digitized and can be exported in mass with ease.  Local research teams and companies that do this kind of service are popular but the main problem with this court data is it's hard to obtain by and hand and through a compiler, the accuracy is problematic. 

The nationwide compilers don't have a team of local researchers that comb through the public deed archive, the cost on that would be too consuming.  I have heard of companies charging up to $1.00-$2.00 per researched deed.

Most lending pros know this from the heart and they work to target things they know will help them like lender, rate, seasoning.  The problem is expectations fall short because the targeting mechanisms are dated and not always current or easy to access at a reasonable cost.

Direct marketing through a scored list ends up getting better prospects though you can't specify lender but because they are pre-screened, they tend to do better for qualification purposes because if you can get just one more deal to close, a marketing campaigns value is improved by the qualifying factors alone.

It seems like all databases that exist, single or multi-sourced, do not cover the same variables of data and that is something that is difficult to bridge when looking at direct mail through the lenses of 'I want to get exactly this x mortgagor'.

More often we have to use what is available to us and try to make sure that we are getting the most bang for our dollar. 

Keep this in mind when developing your campaigns and stay vigilant.

Exclusive Triggers? How can it Be?

I saw a post on BrokerOutpost about exclusive triggers and I just don't know how it's possible.  I think this poster is sadly  mis-informed.

http://www.brokeroutpost.com/loans/brokers/forum/topic.asp?TOPIC_ID=91288

The trigger leads that I offer are owned and distibuted by the credit bureaus and they never make any guarantees on exclusivity.  Any exclusive offer to my knowledge would be in violation of the FRCA act because the bureau would be playing 'favorites' with a broker instead of allowing equal access which is why triggers and pre-screened data are even on the market to mainstream brokers to begin with.

This is perfect example of mis-information that brokers buy into because they are not armed with facts.  Learn about the reality of trigger lead marketing by contacting myself or one of my associates.

Aaron Smith // 800-884-8312 x 127 // www.responsemaker.com 

Powerful Direct Mail Ideas for Mortgage Professionals.

Direct mail is a big hit in the mortgage industry.  With the credit bureaus and compilers targeting homeowners as specific as maturing arms and 60 day note delinquency, the increase in direct mail is a result of the raw data available to brokers. 

In direct mail, the mailing list is the 'essence' of what you are creating.  Wherever you get this data from, it's the major reason and rhyme behind success and the reason for most failures (besides trained professionals to answer the phone and make calls).

You have to recognize as a mortgage broker and loan officer that the fundamental rules of direct marketing apply to the mortgage business just like any other business that sells an intangible product like money or information.

For example, which of the following do you think gets a better result for a typical mortgage mailer:

Full Color Brochure vs. Black & White Letter

The answer is they get about the same response.  Though the color brochure works on sub prime candidates with late mortgage and current delinquency, the black and white worked well for ARM conversion and alt-A type mortgagors.

My point is that depending on what market you are targeting, your direct mail piece itself can have a dramatic affect on response as well as the data you use.

Data itself is also a major consideration and remember that the data source itself should be identified.  Here is a general rule on data quality:

The more specifically identifiable the data source is, the more likely it is to be accurate with regards to the address and data specifics.

If a data source has multiple sources or is compiled from many places then it is probably not a high quality database and will sell for a cheaper price. 

One thing to note though is that lower quality data may be just as good as the more expensive data and that is better in 2 ways - more data to market to (larger universe of potential clients), and a lower cost per lead for your marketing.  The data itself should not compromise more than 20-50% of the total mailer expense.  Savings or expense on the data side may not be as dramatic when you calculate postage, printing, and mailing services.

The mechanics of direct mail get even more complicated with a stable piece that can deliver results.  Most brokers are hesitant to send out 20-50K mailers at a time because of the shear cost involved though they will have typically a better success with more mailers because of the cost savings.  Some want to mail only 1,000 or 2,000 and even with a targeted list this is difficult to predict success.

No matter what your marketing strategy, direct mail can play a significant role in creating a personal relationship with a prospect if you can 'capture the moment' and close the deal.  Good luck and please feel free to drop me a line anytime -

800-884-8312 x 127     Aaron Smith    asmith@responsemaker.com 

800-884-8312 x 128     Blake Epstein  bepstein@responsemaker.com

What lead products are available to mortgage professionals?

We should first clarify what ‘the best’ means. The best is going to be different from one company to another. The right program is based on several factors including:

1. Make up of your office staff (experience, team organization)

2. Complexity of your back end and follow up system (software, staff)

3. Resources available to kick start a marketing campaign ($$)

4. Goals of your marketing efforts (long term sustainable or quick success).

For most broker/bankers, the first two are the most important factors to look at. Mainly, how experienced are your people and secondly, what kind of support staff and software do you have readily available.

Ask yourself; Do I want to be involved in creating the interested and qualified client? Do I want someone that has already shown interested and is most likely qualified for a loan product? A description of common mortgage lead products.

Hot Transfers - One of the most expensive ways to find interested prospects. If done properly, these leads are ready to do a loan and the best part is that you do not have to call them. The problem is that you have to close a high percentage to offset the cost. UNLESS you are ok with a high cost per loan and quick turnover (some are happy with this model since time is always a factor). Most good hot transfer products should convert at 15-20%. This type of marketing is fast disappearing because of market conditions and the ability to create the same product for half the price in-house with good back end marketing systems.

Phone call from and Ad – Always a staple in many markets. This classic advertising is in my opinion a good investment. Think of what has worked for you and stick to it. Most print advertising works well with a good call to action and brand identity. Research techniques and methods of advertising. I personally recommend Greg Frost and Loantoolbox.com as a great way to create good call capture marketing. Especially in smaller markets, your company should have yellow page and RE book advertising as this is especially useful in cross-marketing with Realtors and other business affinity partners (appraisals, lawyers, title companies, exterminators, financial planners, etc…)

Internet and Telemarketing Leads – Much like hot transfers, these leads are fast becoming rare and more and more non-exclusive because of the market and greediness of lead generation companies. There are many companies that still create outstanding leads at reasonable pricing, but these leads are few and farther between than most. Telemarketing leads are also moving quickly to the wayside because of DNC laws and the frequent outsourcing of telemarketing to other countries which of course creates a lower quality lead.

Trigger Leads – Trigger leads are an up and coming product that has created quite a stir in the mortgage community. In 40 states, the bureaus offer the name, address, age of loan, credit score, phone, and mortgage inquiry date to those brokers that want to compete with applicants that have had their credit run. On the one hand, these are proven buyers looking for a loan – on the other hand, they are working through someone else. One thing to note on the trigger leads is there are no media costs – in other words, there is no cost to find the prospect since it is triggered on their credit being run. This makes the retail price of Trigger leads very appealing. Even with a 1 or 2% closing ratio, most brokers are very happy with the overall cost per lead.

Custom Courthouse Data – Specific real time leads can be generated by research teams based on variables desired. For instance, research teams can find out the types of adjustable rate mortgages and when they are to expire based on the research done by individuals looking up court documents. The more complex and rare the data is, the higher the cost per record. Note however that this can be used to pinpoint a lot of information about their loan and could provide insight into how to approach certain situations.

Actual Credit Scored Data – All three bureaus provide a derivative of this product and we recommend that when using an actual scored database, that you implement specific targeting as well as good follow through which we will go into deeper here in the next section. One of the great things about actual scored data is you can pre-filter the file to include only those scores you can work with. The bureaus also have other filters like length of residence, consumer debt, late payment information that can be filtered along with credit score to target specific mortgagors.

Summarized Scored Data - A derivative of scored file as an alternative to purely modeled consumer/homeowner data, this file is a good way to approximate credit scores without actually getting a hard score. The modeling is based around taking the average credit score for a full residential block and assigning each household this score. The only real downside to this type of data is that you cannot overlay as many credit report specific variables and you run the risk of blending scores which, as you well know, two neighbors may have completely different loan needs.

County Recorder/Tax Assessor – The old fashioned and still highly popular choice for many title companies and mortgage companies looking to farm general mortgage holders. While this data will boast a wide range of selectable criteria, the way the file is updated creates a lower quality database. Sometimes 20-30% of this type of data may contain errors or may be different altogether based on how often this information is updated. Since county clerks update at different times and the cost of going to every courthouse is expensive, most will use online programs like www.netronline.com to mine tax and property data.

Pros and Cons of major lead products.

Product	Pros	Cons
Hot Transfer	A pre-qualified person on the phone.  Great for experienced and mid-career LO’s, especially if the lead is solid and well qualified.	Highest cost to create / purchase, quality of pre-transfer information can be poor.  Shopping rate by client is not significantly lower.
Phone Call from Ad	An incoming call is always a great way to attract business, brand and trust are usually instant with this type of lead.	Not always a qualified lead, many are shoppers or people looking because they have been turned around elsewhere, test different media and format to optimize this investment.
Internet and Telemarketing Leads	Generally a responsive lead, purchased internet and telemarketing leads are usually in the market and have spoken to more than one lender.  They are looking for a good deal.	High priced and the self-reported information can be manipulated and incorrect, especially if clients are looking to target specific credit grades.  Most are extreme shoppers and work hard to get the very best deal.
Trigger Leads	Low Cost for a Response Lead, Trigger is 24 hour Mortgage Credit Inquiry.  Very competitively priced for their cost, trigger leads are true response leads because they have actually had their credit run for a mortgage application.	They have not expressly asked to speak with you nor do they necessarily want to speak with other lenders.  However, most are willing to entertain a second opinion.
Custom Courthouse Data	Real time entries of note riders and other deed of trust/trustee information that allows people to see exactly details like arm expiration dates, etc…	Can be costly to test with untapped markets.  Requires a long term commitment to receiving a little bit of data each day.
Actual Scored Data	Most bureaus offer almost anything you could find on a credit report including score, consumer and mortgage actual debt amounts and payments, late payment status, etc...  This data is also updated bi-weekly which makes it the most up to date mortgagor database on the market.	Priced at the high end of the data spectrum, this data requires good marketing follow through and is also great for training new telemarketers on how to approach someone that does meet certain credit/risk qualifications.  Compliance is thorough on this data as well.
Modeled Scored Data	Cost effective, good for targeting specific credit demographics combined with mortgage demographics.  Not as flexible as County Recorder / Tax Assessor Data but half the price of actual scored data.	Ranged Scores are not actual and thus are not good for credit score specific programs.  Extra costs are added for mortgage related information and this file is usually not as robust as the county recorder / tax assessor data.
County Recorder/Tax Data	Lowest Cost, flexible selection criteria and usually has the largest quantity of data.	Accuracy is not as high as Credit Bureau data.  Mortgagor selects have high inaccuracy rates (15%-25%).

Campaign Development -

Maximizing ROI Test Test Test… Most success in marketing is a result of finding out what doesn’t work. There are some programs that will just work better for your company because of how it is structured. Some companies are not set up well to use credit bureau and others have enough layers (openers/jr. LO, etc…) to work with accurate cold data to cultivate successful marketing. Script and Follow up… It is not enough to simply buy a lead product and start calling. Successful mortgage companies have a custom approach to leads and a system for bringing them to application and funding. Here are some tips on scripting and follow up:

1. Create a script that matches the product. On trigger leads for example, you know they are working with another broker so your script should be provide a second opinion and free analysis of their loan product. With late mortgagors, your script will be a different approach naturally.

2. Follow up consistently. Most loans take 3-5 weeks to complete, minimum. There are plenty of opportunities for buyers to move over to your company if they are mid-process with another lender.

3. Set appointments. For those not ready to do a mortgage, being in the front of their mind when they do decide is key. I always advocate setting up follow up or ‘touching base’ phone calls and emails. Building a database of hundreds of prospects and following up with them on a semi-regular basis will generate applications every week for a long time. Direct Mail… From my personal experience, a combination of direct mail and telemarketing yields good results if done properly.

Sending mail can be an expensive mistake if you do not target and properly set up the mailer by following up with a phone call or making a visit. Some targeted lists like late mortgagors or folks with rising debt and low credit scores gets more calls than other more general offers but keep in mind that we are in a market where most people already have a loan with a good rate relative to what they could achieve today. Most refinance is need based so targeting is paramount.

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My intention is to bring awareness to mortgage professionals of new ideas and current topics related to marketing. Please contact me with any questions and take care.

Aaron Smith - 800-884-8312 x 127

The case for a Better Database.

Mortgagor Database options;
Public and Title or Credit Reporting Agency?

Dozens of mortgage professionals of various experience ask this question of me every week: “What type of homeowner (mortgagor) data is the best Return on Investment?”

Folks, there are the ONLY two sources of mortgagor data in the US – courthouse based compiled data and credit bureau data.  Every other source out there is a derivative of this since the only public records of deeds are at the courthouse.  This is the core of most ARM data and adjustable rate riders are not recorded in full by these compilers (only the origination date).

The paradox lies in that credit bureau data retails for much more than court house homeowner or mortgagor data. Addressing the reasons why this is and looking at which will vastly improve your marketing return is the goal of this blog.

There are several issues play into the cost of a marketing list or database, or really any marketing database for that matter. Below are the 4 major factors that go into pricing a marketing mailing/telemarketing database.

• Royalties
• Update Frequency (how often the source documentation is updated.)
• Source data components
• Offer universe

Factor	Credit Bureau	Courthouse
Royalties	Royalties include the credit bureau itself typically 8-14 cents per record based on volume.	None, this is public information.
Update Frequency	Soft Inquiry or products which require FACTA approval typically update daily.  Equifax is the only one that I know that does this.	Every county updates differently and the compilers will not get a full update but once every few months and in some cases like adjustable note riders or rate / loan amount information, the data could be as much as 3-5 years old.
Source Data	Credit report which is updated through current creditors that the mortgagor has.	Recorded Deeds of Trust, Note Rider, etc..
Offer Universe	Firm credit offers limited to mortgage, auto, and insurance lending.  Can also be used for investment and debt consolidation with a firm offer.	General offers such as pools, decks, home security, purchase for certain areas, mass mailing, etc…

Database and marketing companies will offer a couple of products, even some 'compiled' credit bureau data (they sell a compiled version that is OK).  The information is still mainly based on compiled court house data however when all is said and done. Be careful of this because the accuracy of the mortgage related information can be as low as 50% or less because of the infrequent updates and limited information provided by the source documents.

Credit bureau or truly scored data needs a firm offer based on the variables you are pulling by. This inherently makes the credit bureau data more valuable and more market worthy for the industries it does well in.

Looking at the source is probably the main reason why credit bureau data costs so much more than courthouse information.

The bureaus themselves will sell courthouse data because it is still good data for general marketing purposes and because the data is not as accurate, it is more affordable - or is it?

Be wary of credit bureau data represented that does not include specific scores, debt amounts, loan amounts, etc… When exact scores make or break deals, modeled data is unreliable at best.

This brings us to the credit bureau data that exists for lenders with a firm offer of credit.

While this data is not easy to get, it is the most comprehensive and accurate file in the country because lenders make their decisions on the results of these credit inquiries.

Court house data boasts being able to target adjustable rates, interest rates, lender information, etc… The problem is of course that each county updates at different times and the data sources that compile and collect this data are not in the court houses everyday recording new note riders, deeds of trust, and other source documentation that is compiled into the products we offer. This data, because of the infrequent update, can be very dangerous to any marketing budget.

And with the soaring costs of postage, rising interest rates, and expensive payroll (on bad phone leads) modeled information as a basis for direct marketing campaigns create problems and strife among your top performers (or yourself if you do your own marketing).

Calculating the Costs

Now from an accuracy point of view, credit based data (or soft inquiry data) is timely since you can make a good part of your lending decisions based on the information provided in a credit report. Equifax offers a bi-weekly soft inquiry file that from what I have seen, converts the best of any database in the market.


However, the cost associated with true credit based data can reach up to 25, 35 or 40 cents a record. Is it worth the price?

The analytics of cost really come into play here – let’s look at the mean retail value of both databases:

9 cent modeled Court House Data

25 cent Equifax Mortgagor Credit Data

Something to notice are the fixed cost of mailers and cost of telemarketing not including data (print and mail) ($.30-$1.00). Hourly callers pay $12 x 5 hours per shift or $60 per day). This equates to $300 per week, $1,200+ per month excluding revenue sharing commissions to telemarketers.

Since we are working with credit based data and modeled data, let us assume that the credit based data will conservatively convert 25% more qualified mortgagors than the modeled data. In other words, 25% more respondents will be qualified with the credit bureau data conservatively because it is scored to fit your loan programs.


Additionally, the Credit bureau database is more accurate so we can assume that it conservatively converts 20% more callers. What does this combined effect of more conversions and more qualified mortgagors do to the overall response on a 5,000 piece mailer and 2 week calling program?


Assume a conservative 1% call in rate for the modeled data and 1.2% (20% more) for the EQ data. Assume 10% closing ratio for modeled data and 12.5 (25% more) for the credit based data.

Results Matter

Based on our calculations previously, here are the results of the campaign:

50 Responding Leads Generated on the modeled data with 5 closings

60 Responding Leads Generated on the credit bureau data with 7 or 8 closings


The cost difference of data should be examined. 5,000 modeled records hypothetically would cost $450 while 5,000 EQ records would cost $1,250, a difference of $800.


For an additional cost of $800, we see conservatively 50% more loans or in this case 2 or 3 additional loans which yields anywhere from $3,000 - $10,000 in profits..


These numbers look even better for more expensive direct mail pieces since the relative cost % is not much on $1.09 / $1.25 verses a cheaper mailer of .45 / .60.

Telemarketing Insight

Calling campaigns are not as obvious to analyze since the quality of your telemarketer is directly related to the quality of your lead. Think of it like this – the better telemarketing agent, the better quality lead you should provide for the following reasons:

• Good TM’s do not want to waste time on non-qualified clients whereas a new or non-performing TM may not be as conscious of the time they are spending with dead leads.

• TM’s that perform consistently should be held to a higher standard for conversions and with no excuses about leads, they will not have off days or slow weeks..

• Good quality leads make telemarketers happier and for the most part, they will work harder to pull out good leads for your mortgage planners if they know the source of leads is consistently high quality.

Once a person shows proficiency with a weak lead, giving them stronger leads is the best way to retain their efforts and generate the most production.

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My intention here is to bring awareness to mortgage professionals of new ideas and current topics related to marketing. Please contact me with any questions and take care.


Aaron Smith - 800-884-8312 x 127

Building Confident Referrals in the Information Age.

Who do consumers trust?  When building a marketing campaign for your business think about this: People will only do business with when you meet 3 basic common sense criteria:

They know you.  They like you.  They trust you.

How can you build trust? 

People Power - A common mistake is not selling on the success you already have.  Prove your value and grow a new client.  Prove it by putting your money where your mouth is and you will win a client. 

I have a client that does multi-segment data purchases, sometimes up to 100 segments at a time.  it takes me 6 hours usually to do all the formatting to meet her specifications.  She says I cannot refer her because she is a very large company and they don't give out 'referrals' otherwise she'd get a thousand calls a day. 

The reality is that I did give her name out *ONE TIME because I knew my service was good and that she woulnd't leave me especially given the fact that my new potential client has a 7 figure advertising budget.  The point is I didn't abuse the referral but I did use it in a clutch situation. 

This situation is reversed with a client that put a campaign on 'pause'... he referred me two clients and I use him as a reference frequently becaues he is not actively putting money in my company but has done well and is investing in other methods to expand (besides exhausting the data supply we had).  I use him because he is almost remorseful for not using me and I like any sharp business person and going to use that personal connection to build trust for new clients I am pitching. 

As for my active clients that use me frequently, I tend to gauge their interest in helping me grow my business.  I remind them of who supplies them with targeted mailing lists, telemarketing leads and lists, and direct mail services.  They remember to bring my name up.  People power is #1 in business no matter what you do and the proof is in your propsect database.  Splitting time evenly between existing clients and the companies that I am working with to earn their business.  This ensures I am working to get referrals often.

I'm sure most of you have had enough about people power.  One question still remains, how do you get a referral tactfully?

The main idea of tact is simple, nice polite and professional at all times.  Knowing when is as important as knowing how to ask for a referral and belive me you may screw up from time to time but nobody that likes you personally will hold it against you. 

One trick for a referral is what I call a 'pre-ferral'.... What is a pre-ferral?  It's a nickname I came up with for a referral that you get before you do business with someone.  In the mortgage industry, Brian Pert uses this when he meets people right off the bat because he and I both know that people are either looking to borrow money or they know someone that is looking to borrow money.  You just have to be friendly enough in that industry 'mortgage' to get the pre-ferral when you start.  Once you actually get some real referrals under your belt the pre-ferrals and the true referrals will skyrocket.

Putting this all into perspective is different for every industry but the key to getting good referrals and to build your business is treating everyone the same.  Not offering favors or gimmicks for specific people may seem cold but only allow yourself to go within specific bounds otherwise you may feel resentful or that a certain client nibbles at your time often.

The key is getting your talent across to new and potential clients as being the 'expert'.  Ask questions, don't talk about your business or what you do but instead be a doctor or a therapist to your clients needs.  In my business I fail occassionally but that is the breaks in the marketing business and I am sure everyone has to go through it.  And remember, PEOPLE POWER!

Aaron Smith asmith@responsemaker.com 800-884-8312 x 127