With mortgage rates hitting historic lows, more and more homeowners are choosing to refinance. This practice saves most people thousands of dollars over the life of their mortgage and can mean lower payments as well. People used to review countless Yellow Page listings, looking for a bank that was offering competitive mortgage rates. Alternatively, they might have scanned the business section of the local paper, hoping to spot a deal.

These days, most mortgage refinance starts online. The Internet has become the home branch of thousands of financial institutions, all of them competing to refinance mortgages at more attractive rates. Consumers are no longer bound to choose from local banks and other mortgage lenders in their hometown. Instead, homeowners can review offers from financial services companies from across the country, soliciting multiple quotes, and choosing the one that offers the most advantageous combination of rates, service, and accessibility.

With most mortgage refinance leads being located online, consumers can usually complete the entire process without ever leaving home. They can fill out applications and other forms online from the comfort of their own computer desk. These forms can even be signed and submitted electronically. Online mortgage refinance services are easy and efficient. Most feature a quick approval process and most refinance transactions performed in an online environment are completed within the stipulated deadline. It is this kind of rapid approval, combined with competitive rates, which are tempting consumers to abandon brick and mortar financial institutions for mortgage lenders they have only encountered in cyberspace.

This kind of competitive environment can only benefit consumers. With increased competition, mortgage lenders are forced to offer better and better rates as well as find ways to provide innovative customer service. However, it’s also true that some people merely use the Internet as a comparison shopping tool. They educate themselves about the different mortgage refinance products that are available on the market, comparing rates, services, terms, and fees before approaching their own financial institution about refinancing options. This only highlights the importance of banks and other mortgage lenders maintaining relevant and effective websites. The more accurate and detailed the data they provide on their websites is, the easier it is for the consumer’s questions to be answered conveniently. The more information a website contains, the more informed the consumer is, and the more likely they are to apply for a mortgage refinance that fits their budget.

Having bad credit puts many homeowners in situations that are difficult to get out of. Many consumers ruin their credit because they are not making enough money to regularly pay their bills on time each month. However, if you have bad credit, it can be difficult to get a loan or refinance your mortgage, so that you will have more disposable income.

While this may be tough for many homeowners to hear, it will be very difficult or even impossible to refinance your home loan if you have bad credit. Lenders will be unwilling to offer a homeowner a new loan if they are not likely to make the required payments. Therefore, in order to be eligible for a refinance, you will need to determine an effective credit restoration plan.

When a consumer finds themselves overwhelmed with debt and with limited options, credit repair may seem impossible. Fortunately, in most cases, credit restoration is possible when approached logically and realistically. The first thing that a consumer must do to repair their credit is to obtain a credit report.

After obtaining a credit report, consumers can then begin the credit restoration process. Carefully review all aspects of the report, instead of only focusing on your credit score. Check that all information is correct and determine if their are any debts in collections or currently in default. These debts will generally need to be taken care of before a lender will allow a homeowner to refinance.

Once a consumer knows what is negatively affecting their credit, they can more effectively create a good credit repair plan. This will require a consumer to determine what portion of their monthly income is spent on bills and the amount of disposable income that they are left with each month. Consumers should tightly budget their disposable income, so that it will be possible to repay any debts that are currently in collections or judgements that they may have.

In order for a credit restoration to be successful, consumers will also need to be sure to pay all bills on time and keep all accounts in good standing. However, if after creating a budget, a consumer still finds him or herself unable to pay their monthly bills, they will need to seek the help of a professional. There are many credit repair professionals that are able to help clients figure out ways to repair their financial situations. Fortunately, once consumers fix their credit, they will be able to refinance their mortgage, which will lessen their financial burden even further.

Refinancing has been quite popular over the past several years, as mortgage rates have been far below the national average in many places throughout the country. As a result, mortgage lenders were prepared to offer excellent rates and promotions for borrowers who wanted or needed to save money with a refinance loan.

Refinance mortgage rates are generally a percent or more below the average mortgage rate, and therefore these loans offered extremely attractive interest percentages along with many other benefits. As home sales increase across the country, mortgage rates are beginning to slowly rise back to prior year rates and there is a fear among lenders that this may slow refinance leads.

Whether refinance mortgage will rise significantly remains to be seen, but judging from past performance it appears that they probably will. Refinancing is an excellent way for borrowers to pull out cash based on the amount of equity that they have developed in their home while in repayment of their original mortgage loan. So, not only were refinance mortgage rates attractive but so was the prospect of paying off other costly bills including high interest credit card accounts.

Refinance leads were not hard to generate for lenders with great rates, because the rates themselves did the talking to consumers. Once the rates increase, lenders will need to find new ways to generate leads and attract borrowers. This is a time consuming and often very costly situation for lenders who rely on a constant stream of refinance leads.

The hope is that as mortgage rates begin to climb, refinance rates will react slowly and there will still be many people interested in refinance loans. Even with slightly higher interest rates, refinance programs will continue to offer excellent advantages for borrowers looking to cut costs and lower their monthly payments.

The best mortgage leads are those generated as a result of marketing online. Lenders spend far less money with online marketing campaigns as there is no cost per individual contacted and once the work is done, it’s done. Lenders have had to make significant changes to their marketing techniques over the past decade as a result of the internet and the fact that most Americans are now doing almost all of their research for mortgages online.

Having access to hundreds of lenders who are trying to get their business with competitive rates and loan benefits means that consumers have definitely benefited from internet marketing campaigns. The goal is to catch the mortgage customer searching for the best rates available and to catch their attention immediately.

As interest rates have settled at a decade low in the past year, lenders are able to attract leads with these rates. Whether someone is looking to buy a home or refinance a current mortgage loan, they are looking for the lowest possible interest rate. The more a lender makes their rates known, the best mortgage leads they will generate.

A mortgage lead is what happens when a potential borrower first contacts a lender for information. This could be through a phone call, a walk in visit or through a request for more information form on a website. Lenders need to convert these leads to customers and they will work hard to get a borrower financed for excellent mortgage programs once they have made that first contact.

Low rates have been good for lenders, as they are able to convert more leads to customers than every before. This includes the number of leads they get for refinance as well as those from first time home buyers. Marketing campaigns will continue to expand, as lenders need to meet the expectations of internet users looking for quality loans at excellent interest rates.

We often hear, “look for the pain point” in learning to sell. Is that always the magic to getting the sale? Skip Anderson, of Selling to Consumers is not so sure.

Looking for More Than Pain in Mortgage

What About Debt Settlement?

Sure, that is fine for mortgage, but all debt customers are coming with pain right? Maybe not. In fact, I would venture to guess many of your debt settlement prospects don’t even know they have pain yet. That is why aged refinance and loan modification leads are so profitable for debt settlement companies.

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Have you ever tried to get someone to talk to you by pelting them with endless statements about you–how great you are, how much you are better than others, or how successful you are going to make them? No, of course not.

Ironically, that is precisely the technique we use to sell people on developing a business relationship with us. Instead we should be asking questions and gathering data. Let the customer tell us what it takes to sell them on our product or service.

That is the power of the open-ended question.

People love to talk about themselves–their successes and their challenges. And that is precisely the information you would love to have to guide your sales pitch. So, let it happen.

Let’s take a look at some good open-ended questions:

• When did you feel like your debt was first getting out of control?
• What is the most stressful part about your current debt?
• What led you to consider refinancing your mortgage?
• What made you select this house (neighborhood, city, state)?
• Is this your first mortgage?
• Are you working now?
• What is most important to you in a mortgage or debt solution?
• Have you talked to others about a mortgage or debt solution?
• What is your biggest concern?

Do you have some good open-ended questions you use in the sales process? Add them to the comments below.

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I am continually amazed by the innovation of customers. Some of the most creative are those that buy aged mortgage data. These buyers are a diverse bunch. I thought it might be interesting to you to see who some of these buyers are and why they buy aged mortgage leads, versus a more specific lead type.

Mortgage Refinance

This is certainly the most obvious of the aged mortgage data buyers. These are folks that are looking for two scenarios:

• Borrowers who might qualify under new loan programs
• Borrowers who might be enticed by a changing mortgage rate environment

In addition to these very specific scenarios there are many aged mortgage leads that are simply not contacted. Really efficient mortgage loan officers and businesses are aggressively scooping up these bargains and turning them into bigger margins.

Loan Modification Leads

This is another big use of aged mortgage data. These leads are being used to identify potential candidates for loan modifications. Many times declined mortgage refinance borrowers are prime candidates for the variety of loan modification programs on the market. Unfortunately, instead of being referred to a qualified or licensed loan modification specialist they are simple turned down. Even worse many of they abandoned mortgage leads or borrowers don’t even know about loan modifications. Making it unlikely that they would apply as a loan modification web lead.

Real Estate Leads

More than one real estate agent or broker has jumped in front of mortgage brokers by grabbing and building a database of aged mortgage leads. Often real estate shoppers with start their buying process by doing some mortgage rate and qualification shopping. Often this results in mortgage brokers dropping these leads on the floor until they are closer to a home buying decision. What better lead could a real estate broker get?

Debt Leads

Like the mortgage refinance and the loan modification lead buyers, debt businesses find gold in the mountain of discarded or uncontacted aged mortgage leads. Often these mortgage refinance leads were made in hopes of doing a cash-out refinance to relieve some debt burden. For so many years homeowners have been taught to use their home equity to solve this problem. However, with the new conservative market there is little opportunity to do it that way anymore. Big opportunities for debt settlement companies in these leads.

Database Marketing

Finally and probably one of the most effective uses I have seen for aged mortgage data is to populate database marketing campaigns. Many times these leads will return value over the long-haul, especially if you consistently market to them.

Adding them into your traditional email marketing and direct mail marketing lists can give you the extra scale you need to be successful.

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The multitude of government programs and stimulus packages has sparked another refinance boom. How are you managing this opportunity? Are you getting the job done? Are you positioning your client database for the future?

The last mortgage implosion should teach us a little about smartly managing opportunity.

Managing Opportunity

Many mortgage brokers are breathing a little sigh of relief as government stimulus has kicked up another refi boom. The question is are you thinking about how you are you are managing this for long-term opportunity?

Stop simply slinging loans and start building a business–this is the perfect time. Get a strategy to turn this into a seed strategy for long-term success.

Customers First

It all starts with the customer. Put them at the center of your refinance boom strategy. WOrk hard to give them a great experience. This will not only increase your closings and satisfaction, it will fill your sales queue with referrals.

Most homeowners are experiencing frustrating long waits for underwriting, processing, and closings. Minimize this frustrateion with frequent (pro-active) updates to clients in process.

Design long-term marketing campaigns that gives clients recurring value and make it easy for them to give you referrals.

Thinking About the Future

Step-back and give yourself time to think about the future.

What are you going to do to help these clients? Is there a way to more efficiently manage their contact information, follow-up, and special circumstances? How can I build a long-term value proposition?

I guarantee many will miss this opportunity–don’t let it be you.

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Purchasing aged leads is like any other marketing technique. It requires trial and testing. One of the biggest questions in determining your aged lead buying strategy is weighing the importance of age versus targeting. Aged leads inherently present you with an additional variable in your marketing equation–time.

Customer Targeting

Finding the “right” customer is always a challenge. It is the fundamental art of marketing. Good filtering or targeting, to match with your product and sales offerings, is critical to the success of your aged lead buying.

Aged leads can present you a unique opportunity to really evaluate and test your customer targeting. Real time or self-generated leads provide you little control of what shows up in your sales queue. In contrast, an aged lead buy gives you the opportunity to pull and try very specific customer target groups–even try different sales and marketing methods.

Evaluating Age

Unlike other marketing methods, aged leads introduce another variable–time. This can be challenging if you don’t carefully think about your sales objectives.

It might be natural to assume that the newer the leads the better they are. This is an assumption that can be very misleading–leaving opportunity on the table and costing you more money. Take for example, loan modification or even mortgage aged leads. There is definitely a secondary opportunity in older aged leads in the current market. Many of the mortgage leads that are 30-90 days old were not qualified for loan modifications or mortgage refinance when they first applied. However, with additional government programs and assistance entering the market in the last 30-90 days many (maybe even most) of these leads are now prime targets.

Getting the Right Mix

The bottom line is that you need to understand the additional variables in aged leads and leverage the opportunities they present. Getting a smart mix targeting and aged leads can maximize your conversion, while minimizing your lead costs.

Testing

The other opportunity with aged leads is the ability to test a lot of marketing theories and assumptions in a very controlled way. Set up very specific methods and objective to test lead performance. Then you can very effectively kill the bad and double-down your marketing dollars on the winners.

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One of the biggest fallacies in the mortgage CRM business is that you are creating a customer database for repeat business. The fact is that 70% of mortgage customers couldn’t tell you the name of their mortgage broker on their last transaction days later.

That simply means that every customer starts from scratch every 5-7 years when they go to get their next mortgage. What you are playing for is a referral from that past client, based on your lead nurturing strategy.

Repeat Customers

The statistics are what they are: homeowners purchase or refinance a home once every 5-7 years. The average mortgage broker is in business about three years. That means that by the time the average customer goes to get a new mortgage the mortgage broker is out of business. So, most homeowners simply skip that step and go on the hunt for someone to help them online or by asking friends.

Loyal Customers

In a good mortgage CRM you should be creating loyal customers as much or more after the closing than before the transaction. You want them to give you permission to engage them from time to time about mortgage news and information. This permission will not only motivate them to pay attention to their own needs, but they will increasingly be tuned into conversations that are opportunities for you to get a referral.

Referral Customers

Your CRM should be segmented and tracking your top referral customers. These are the people that you should be sending thank-yous and incentive to. Don’t ask them for their mortgage refinance business–ask them to tell-a-friend.

Referral Partners

The same thing applies to local businesses and professional pillar business. You should be creating “channel” partners of your community leaders, doctors, attorneys, and accountants.

Stop thinking of your CRM as a sales system and start managing it like a referral system.

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