Image: Fotolia
Image: Fotolia

Mortgage originators are increasingly turning to service providers for help developing relationships with referral sources as home purchase loans become the majority of their new business.

Refinance customers typically walk in the originator's door or call on the phone, but this business has dried up. Most of what remains is home purchase business, which needs to be seeded through relationship building with past clients and business-to-business referral sources.

"It is being able to provide a high level of service, being able to do it efficiently and in a way that can differentiate you from your competitors," says Nicole Hamilton, CEO of Tactile Finance, a technology vendor based in New York.

That might be a message that some originators have not been taking to heart.

Originators need to have a customer relationship management platform in order to survive in any environment, purchase or refinance.

"You have to have something. I'm constantly surprised by the number of loan officers I meet that don't have a database or some kind of marketing system in place that you can do set it or forget it with," Craig Strent, the CEO of Apex Home Loans, Rockville, Md., says.

Strent is a customer of Mortgage Returns, a CRM system provider based in St. Louis. Originators need to practice one-to-one marketing in any environment, but especially in a purchase one, says CEO Jim Blatt.

The definition of one-to-one marketing is for the effort to go "beyond personalization. Personalization means I am going to put the name and address of my borrower or prospect onto a marketing piece, and then send the same content to everyone. That's really mass marketing.

"One-to-one marketing is, 'I'm going to customize the content of the message to the individual that gets it.' It is messaging that is customized to the individual.

"The reason to use one-to-one marketing is results. Everyone would rather get information that is relevant to them, compared with mass marketing, which is hopefully relevant to someone," Blatt says.

There are companies like Apex which are adopting this strategy.

One-to-one marketing is not just for B2C, but also B2B. Materials can be created for specific referral partners which shows how the lender and/or originator are managing the people they recommended, Blatt says.

Your Realtor sources want to know that you are still engaged and interested in doing business with them and mass marketing does not reflect that, he says.

This kind of marketing applies to both purchase and refinance cycles in the mortgage business. Instead of sending a card that says happy holiday, the recipient gets something that says your loan has been reviewed and it is time (or not time) to refinance, for example.

A first-time home buyer should be sent educational pieces about the mortgage process; one item can be about here is what to expect when you buy a house.

Mass marketing doesn't accomplish this purpose, Blatt says.

Mortgage Returns has systems in place to measure return on investment for its marketing programs.

People who use one-to-one marketing "are converting 40% more prospects into customers than the guys who are doing mass marketing," Blatt states.

There are not a lot of programs out there that let you customize the message to the consumer, says Strent.

"The one-on-one marketing is valuable to me in terms of the individual customization of the piece," he says.

The program is used primarily for his existing customer base and the next most frequent use is for prospects.

Loan review letters are successful for bringing in new business for his company. "The customer has the comfort in knowing their mortgage professional is watching out for them and keeping an eye on their mortgage and alerting them to opportunities to save money," Strent, who is also still an active producer, points out.

Social media is more mass marketing than one-to-one marketing.

But the latest update to Tactile Finance's Pro software allows mortgage originators to use social marketing features.

Pro fits the one-to-one marketing paradigm because it allows mortgage originators to show consumers a side-by-side comparison of various loan types and features via remote screen sharing.

The update allows originators to show more loan types and make better comparisons, Hamilton says. Consumers not only understand what their options are, but what the implications of each of the options are.

The social marketing part of the update makes available banners for websites and badges for email or blogs. The banners and badges link to the originator's Tactile Finance website.

Users have told Tactile Finance that they want to market to their customers and referral partners that they are using this product, Hamilton explains.

InfoHounds, Durham, N.C., looks at a lender's CRM software and through various algorithms and searches, gives the originator a notification if a past client has listed a home for sale.

"That's just a very early indicator that they're entering back into the market. It is better than a credit trigger, because with a credit trigger, they are already guaranteed to be sitting across the table from another loan officer," says CEO Jason Kelley.

The company is a data as a service firm and it takes a data-driven approach to everything it does. The platform's creators decided its service needed to be platform agnostic and work with different CRMs in the market.
InfoHounds monitors over 1,000 sources of ever changing real estate data. It has a "ridiculously complicated series of algorithms" which monitors MLS and for sale by owner postings. "If it hits the Internet, there is a better chance than not that we're going to find it. And that's just half the battle. We've got to match that intelligently with the loan officer's database. That is a whole very complex undertaking that people forget about," Kelley says.

The company went live with its product in the middle of 2013.

"With technology startups, half of the battle is timing. You can build something incredible but if no one is going to use it what is the point," Kelley says.

There are also organizations which are customizing their message for a target audience.

VA Loan Captain is partnering with Military Times, a publication of Gannett Government Media, to push out information on home financing to members of the armed forces.

Besides providing information and advice about the Veterans Administration mortgage guarantee program, VA Loan Center on MilitaryTimes.com provides real-time rate and fee information.

The goal of the partnership is to give active duty service members and veterans "comprehensive and objective information about the VA home loan process," says Grant Moon, CEO of VA Loan Captain.

"It is education and information from veterans to veterans, which I think is pretty unique," he said.

This is one of the largest partnerships for VA Loan Captain, which Moon founded in 2011 to help provider veterans a marketplace with the best rates and fees on a VA mortgage.

VA Loan Center site users type in their ZIP code after which they are brought to a co-branded page where they have access to the Learning Center.

The consumer can put in details regarding their property and they can get a pricing scenario which includes a number of real time rate and fee quotes from several VA home loan providers, Moon says. It is available for both purchase and refinance loans.

There are five active lenders in the VA Loan Center program. Overall, VA Loan Captain works with seven lenders in total with a wait list of 18 more.

Federal fiscal year 2013 saw a record number of originations for the VA program. The agency has removed a lot hurdles and made the process easier for veterans to use this benefit, he says. Because of features such as 100% financing, many service people and recent veterans are actively looking to take advantage of this program when buying or refinancing a house.

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