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Mortgage Leads - A Mortgage Lead is a Mortgage Lead ... or is it?

Internet mortgage leads have been around for more than a decade, yet many lending professionals do not really understand what they are, where they come from, and what different kinds are available. In...

Internet mortgage leads have been around for more than a decade, yet many lending professionals do not really understand what they are, where they come from, and what different kinds are available. In addition, new business alliances and technologies are making some Internet mortgage leads more complete and easier to close than ever before. Here is an overview of the types of mortgage leads now available:

Traditional Internet Leads. An Internet mortgage lead is generated by a consumer who completes an online form. The value of the lead depends on the reason the consumer completed the form. Was the consumer enticed to complete a form by the promise of a free gift or a contest entry? If so, the value of the lead is diminished. In such cases, the consumer is motivated with a desire to receive the gift or prize, not to get help from a lending professional. By contrast, if the consumer completed the form after proactively searching or a solution to a financial challenge, then the Internet mortgage lead can be quite valuable. Such Internet leads are dubbed “organic” because they emerge organically from a proactive online search. The value of the lead is enhanced when the website “hardens” the response by stating that the person will be contacted by a lending professional.

Most lead providers “scrub” their leads by matching the information provided by the consumer against various databases. Website visitors sometimes submit incorrect information, fearing that they will receive spam or telemarketing calls. Lead providers have created software to weed out not only phony names but also false addresses and phone numbers. The scrubbing software may match the area code of the phone number on the form to the ZIP code of the address to see if the two are compatible, or it may check names against known addresses. The extent of the lead scrubbing can be assessed in part by the replacement policy of the lead provider. If the provider guarantees replacement when contact information is invalid, the lead buyer can assume the information is reliable.

Enhanced Leads. Recently,, an Internet lead provider located in Newport Beach, California, has taken the verification process to a new level. Drawing on its partnership with First American Financial Corporation, the nation’s largest provider of real estate information, adds accurate property and loan information to the bare-bones Internet lead. Marketed as “Mortgage Plus Leads,” these long-form leads include extra fields not completed by the consumer, including original lender, type of loan, interest rate, appraised value, equity position, APN code, home size, lot size, date of construction, and more.

ARM Leads. Using a similar process, is also able to identify homeowners who will be facing large increases in their adjustable rate mortgages in the next 30, 60, 90, even 120 days. Working with First American, is able to provide ARM leads that include enough loan and property data to enable a loan officer or broker to create an estimate before calling the refinance lead. The phone numbers of these refinance mortgage leads are checked against the national Do-Not-Call registry to ensure compliance. The government estimates that $1.5 trillion in adjustable rate mortgages (ARMs) are scheduled to reset in the next two years. Many of these mortgages will not qualify for refinancing, based on the plunging value of homes, but many will, and in this time of decreased new home loans, the refinance market can help mortgage brokers remain busy and profitable.

Hot Transfer Leads. Most Internet leads are delivered in via email. The mortgage broker or loan officer then calls the phone number provided in the lead. Consumers do not always answer on the first call, of course, leaving the lending professional with the option of leaving a voice mail, calling back, or both. Live transfer leads were developed to save loan officers and mortgage brokers time spent getting prospects on the phone. With a hot transfer lead, the lead provider establishes contact with the prospect by phone and further qualifies the lead. The call center then transfers the “hot” call to the lending professional. Hot transfers cost more than traditional leads, of course, but many lending professionals find that they pay for themselves in efficiency and a higher conversion rate.

Vintage Leads. Most Internet leads are delivered in real time, as they come in from the consumers, or in batches sent out once a day. The leads may be sold as “exclusive,” in which case they are not sold to anyone else. A lead also can be sold as “shared” leads, offered to a limited number of loan professionals, or “nonexclusive” leads, offered to any number of loan professionals. After a few days, the leads begin to lose their value, in part because the consumer may have received several phone calls from lenders. If they have not signed a deal with anyone, however, the lead may be marketed as a “vintage” lead at a greatly reduced price. Lending professionals with exceptional sales skills find that vintage leads can yield good results at very little cost. Some loan offices like to provide vintage leads to new hires as way of letting them get the hang of selling on the phone.

Internet mortgage leads come in many varieties and flavors. The relative merits of each kind of lead depends on a lending professional’s spending budget, time budget, sales skillsFind Article, and business focus.

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An award-winning author of 28 nonfiction books for children and young adults, Bradley Steffens is a frequent contributor to online and print publications, including Discovery Channel Magazine and the Los Angeles Times. His 2007 book, Ibn al-Haytham: First Scientist, is the first biography to be published in English about the medieval Islamic scholar known in the West as Alhazen.

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