For the mortgage industry, 2017 was a year of transition. Interest rate increases, global unrest and environmental disasters led to market fluctuations. Volatile rates and tightening refinance volumes exposed mortgage companies and originators to increased competition for a smaller pool of borrowers. As the market shrunk, optimizing lead acquisition and marketing programs became even more important for realizing a competitive advantage.
Leveraging marketing analytics and consumer-journey data is one of the most effective ways to regain a competitive edge. The consumer journey is a map of the steps that customers take on their way to a purchase. As borrowers shop for mortgage products and originators, their direct interactions with mortgage companies and third parties provide valuable insight into whether they are simply educating themselves about the process or ready to pursue a loan.
Understanding this data, and the insights it provides, allows lenders and mortgage companies to refine their understanding of potential borrowers and identify and nurture those who are actively in the market for a loan. Although mortgage originators are often at the mercy of macroeconomic conditions, lead analysis and consumer insights can help them reach the right borrowers and meet acquisition targets — even during times of market uncertainty.
This process starts by partnering with providers that can provide transparency with respect to the quality and risk profile of online leads. A home is one of the largest purchases an individual makes. It takes extensive research to find the right loan with rate and payment options that fit that particular borrower’s financial needs. Not everyone goes through this process in the same way. Knowing key characteristics about online leads can help originators align their contact strategy with a borrower’s intent and motivations.
Before buying online leads, mortgage companies and originators should know the age of the lead and the intent of the consumer, and should ensure they have permission to contact the consumer. Here are some specific insights in those areas that can help a company build a more efficient lead-buying program.
Contacting a prospect in a timely manner, or maximizing the “speed-to-lead,” is crucial for meeting target contact rates because purchase intent is typically highest right after submitting the lead. More often than not, borrowers working through third-party sites will qualify for a loan program from several lenders, all of whom may attempt to contact them as quickly as possible.
“ The time borrowers spend on a lead form can serve as an indicator of their engagement or relative intent. ”
As a result, receiving a lead just a few minutes after it was submitted may result in missing the opportunity to connect with that borrower. Receiving a lead from a publisher within seconds provides the best chance of reaching the borrower first.
New-customer acquisition programs face heavy competition, especially when volumes are down across the market. Originators who work from online leads must prioritize new leads to maximize their opportunity with each borrower. It is important for lead buyers and sellers to work together to ensure they are spending the most time on the right consumers.
Research has shown that 60 percent of mortgage customers visit more than one third-party site when shopping for a loan. Understanding if a borrower is engaged with competitors provides mortgage companies and originators with a level of insight they can use to make routing and prioritization decisions.
Companies may choose to prioritize a borrower who is actively engaged with several competitors to keep their brand in consideration. Conversely, an originator may reach out to borrowers who show less activity with other companies to take advantage of decreased competition for their business.
The complex nature of a mortgage requires companies to obtain detailed financial information from prospective borrowers. Even simple lead forms can require data a consumer may not have readily available, such as home value or credit score. Longer forms may have more detailed requests, such as asset and liability breakdowns. The time borrowers spend on a lead form, therefore, can serve as an indicator of their engagement or relative intent.
Prioritization and routing strategies vary by company and the borrower-acquisition model in place. A deeper understanding of borrower activities can help mortgage companies and originators make better decisions for each lead they receive.
Following the financial crisis, mortgage companies have been subject to increased regulation, including one rule that spans multiple industries and is responsible for millions of dollars in lawsuits — the Telephone Consumer Protection Act (TCPA). Originally enacted in 1991, the TCPA restricts telemarketing calls and the use of automatic-dialing systems.
The TCPA has grown in scope and litigation in recent years, and should be a concern to anyone purchasing leads — especially as mortgage companies increasingly call and text borrowers on their mobile devices. Even though a lead may originate on a third-party site, originators and their companies still bear responsibility for validating that express written consent was received before contacting the consumer. As a result, most compliance teams set strict requirements to ensure all leads are compliant with the TCPA.
Understanding if the consent language on a lead form is clear, conspicuous and successfully produces borrower consent — all in real time — allows companies and originators to decide if and how to contact the consumer. Storing proof of that consent is just as important in the event a complaint is filed. Avoiding TCPA violations is critical to avoiding unexpected court costs and penalties in a market where margins are already tight.
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Economic conditions will always fluctuate, and the nature of that flux will affect the number of borrowers in the market. Achieving a high level of insight into online leads involving borrowers who are actively in the market will help mortgage companies optimize their revenue opportunities.
As more consumers research and initiate their home-loan process online, lead buyers and sellers must work closely to provide transparency into lead- performance and compliance issues. Those mortgage companies that can execute a program based on these principles will be more likely to reap the benefits of online leads.