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Mortgage Leads Trends

Mortgage Leads TrendsRecent loan lead activity

July 31, 2008

By SAM GARCIA

As one of the biggest mortgage lead generation companies loses more than $150 million, government loan leads are rising to prominence. Meanwhile, a new report discusses how the business of mortgage leads is evolving.

A new analysis from Online Banking Report suggests mortgage lenders can no longer buy their way into high-profile positions through Google AdWords. Instead, they must complement financial investment with online relevance and user interest. Strong placement can also be obtained through a transparent search process.

Dubbed “lead generation 2.0,” new models shift power from advertisers to users, Online Banking said. The report indicated shopping for a mortgage may eventually resemble an eBay-like process that enables prospective borrowers to engage in a real-time auction or to “buy it now” from a reputable provider, as vouched for by the community.

The online reverse mortgage market is mostly untapped, according to the Reverse Mortgage Directory LLC. Among the benefits of marketing home-equity conversion mortgages online is the ability to reach third-party decision makers such as the adult children of seniors.

“The belief among many reverse mortgage professionals is that the senior demographic is not online and, therefore, there is no need to get involved in Internet advertising,” a statement from the Los Angeles-based firm said.

The directory noted that reverse leads must be incubated utilizing a solid follow-up strategy, because prospective reverse mortgage prospects lack the urgency that originators might find with younger conventional loan prospects.

LendingTree LLC announced it now generates leads for loans insured by the Federal Housing Administration. Leads are screened through an FHA tool that qualifies loans prospects based on criteria including county loan limits and loan-to-value ratios.

“We’ve discovered that most borrowers are unaware of FHA-insured loans and what it takes to actually qualify for one,” a LendingTree announcement Tuesday said. “Traditionally, FHA-insured loans have been seen as an alternative for lower- income borrowers, borrowers with low down payments or those with shaky credit histories. But now, even well-to-do borrowers in affluent housing markets are looking into the availability of FHA loans.”

Mortech Inc. said Monday that its own customers from the LendingTree network have increased more than 450 percent during the past year. Among new Mortech customers are AmericaHomeKey, First Meridian Mortgage Corp., LSI Mortgage Plus, CFS Home Loans and Hunter Financial Group LLC.

Mortech claims it helps lenders boost their closing ratios by simplifying routines associated with daily pricing, product decisioning and prospect management. The Lincoln, Neb.-based firm reportedly is LendingTree’s primary preferred provider of lead management and pricing technology.

As LendingTree prepares to be spun off from parent IAC, the Charlotte, N.C.-based company suffered a $177 million second quarter operating loss, according to an earnings report yesterday. The poor performance was attributed to lower volume, a shift to lower margin offerings and stricter underwriting criteria.

“Operating loss includes a $104.9 million impairment charge related to goodwill and intangible assets, reflecting the company’s assessment of the likely profitability of the lending segment in light of the persistent adverse mortgage market conditions,” the report said.


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