Archived Columns

Lead Generation Hot Topic at Real Estate Connect

By Scott Kersnar, Editor, Mortgage Technology Magazine

Some real estate and mortgage lead providers had their moment in the limelight turn into a day in court, as mortgage professionals attending the Real Estate Connect Conference in San Francisco rose to complain about too many bad leads coming their way.

Lead generation was the marquee topic at the conference's Internet Mortgage Marketing Summit offered at Real Estate Connect at San Francisco's Palace Hotel. Back-to-back mortgage sessions took up search engine and portal marketing, pay-per-click, pay-per-call, lead validation, going beyond online loan applications, how to work Internet leads and best practices for Internet lead providers.

While not naming any specific providers, Mark Feder, president of San Diego-based Preferred Mortgage Solutions, rose from the audience to say that a full 25% of the leads purchased by his company from lead-generation providers turn out to be "fake" or otherwise seriously flawed.

HouseValues, a conference sponsor, was targeted for complaint by several attending loan officers, including Dario Krecic of Paradise Financial, Concord, Calif., who said that the 10 leads per month he pays for from HouseValues have not brought him a single close in the nine months he has been under contract with them. He stated that the leads he purchased frequently did not have complete information, particularly phone numbers. He said he expected that a lead would go through "at least minimal examination before it was sold to me at $60 or $70 a pop. Now I am learning after the fact that I as a buyer have a certain responsibility" to ask vendors more questions about lead quality.

Responding to another complainant, panelist Kevin Akeroyd, HomeValues vice president for mortgage, said HomeValues' purchase of The Loan Page was putting in place additional filters and practices that would address the deficiencies found in the company's leads. At the time HomeValues purchased The Loan Page, Aegis Mortgage marketing VP Forrest Young commended The Loan Page as a proven lead-generation partner.

The audience complaints gave panelists an opportunity to tell mortgage professionals how to sharpen their ability to understand and deal successfully with lead generators. TARGUSinfo general manager Dave Wengel reminded attendees to find out the source of leads generated, when the lead data was gathered, whether the leads are sold to other buyers, whether the provider verifies information before passing it on to buyers and what lead buyers have to do to get their money back on bad leads. TARGUS validates leads for lead providers, segmenting them into A leads that need to be called immediately because they are ready to transact now, B leads that are in less of a hurry and C leads that are not ready to apply now but should be targeted for a "drip marketing" campaign and contacted routinely over time.

Several panelists stressed that mortgage professionals should consider conversion strategies more than the price of leads. Glenn Houk, co-founder of LeadQual LLC, noted that Internet borrowers value speedy service and that the shelf life of Internet leads can be minutes rather than days.

With 75% of Internet mortgage shoppers going online to look for rates and fees, there is a premium for identifying borrowers ready to transact. LendingTree SVP and general manager Lori Collins reminded attendees that the purchase-money market is "still growing and expected to continue to grow," making it well worth it for originators to pay for good leads. With 83% brand recognition by consumers, LendingTree ranks No. 1 among lead providers.

Since talking to a live loan prospect takes all the mystery out of lead quality, the pay-per-call model offers loan officers clear value. While pay-per-click leads have been successful, clicks are "opaque," and subject to fraud. At $40 to $80 a call, many mortgage professionals are finding PPC the best choice, said Ingenio Inc. sales director Ross Weinstein.

Ingenio, IPS Leads Inc. and others are finding a ready market with loan consultants that want to cut to the chase and deal with would-be borrowers ready to act now.