I have been having some fun over the past couple of weeks by visiting with you about how critical conversion is and will continue to be for all of us in 2014. This industry doesn’t always seem like a lot of fun, especially not these days, but we do what we can. Last week I actually advocated the use of torture (statistical torture of numbers) as a method of getting what you need.

Actually, it was about how to be analytical in your approach to understanding the market, such as where you should be investing in loan officers and where you may do better with a consumer direct.

This week, I want to visit with you about using data to help conversion. In other words, how to find the best possible leads, which of course are those that are most likely to respond to your marketing efforts. Full disclosure: none of what I’m going to share with you actually came from the NSA. If fact, they don’t even know that I’m sharing this information...well, I guess I can’t say that.

Finding the right prospect to sell a mortgage to is not as simple as some outside our industry might think. It’s not just a big ticket item, it’s a costly transaction that requires a piece of real estate to back it up. It’s not just about signing on the dotted line. It’s about undergoing a significant and intrusive financial examination. If this were medicine, we wouldn’t be using those little wires they stick into basketball players’ knees. We employ those open heart chest spreader things.

But even more challenging than the process itself is the timing. One of the challenges we have always faced here is finding the consumer at the right time in the buying cycle. The consumer has to really need a mortgage to sign that application. This is one of the key reasons that sales costs are so high for mortgage origination. After all, the typical consumer “needs” a mortgage only once every 5 to 7 years, normally triggered by a change in circumstance (buy new home, home improvements, need for cash out, or substantial change in interest rate).

The answer to finding that borrower may lay in surveillance—using data to keep track of these potential changes in circumstance and taking action at the right time. It has always been true, at least when it comes to sales, that the more you know about your prospect, the more successful you will be. We compared this to military campaigns last week and the analogy fits. Sort of. The big difference is that, in a war, the people you’re trying to find out about are on the other side. In the mortgage business, they are often hiding in your own portfolio. It’s not that hard to find out about people you’re already doing business with. Or is it?

In our discussions with banks around the country, STRATMOR has found that few companies are set up to actively monitor the accounts they already have in the bank. Finding new mortgage lending opportunities among the consumers you’re already serving blows away other methods of prospecting. This is because banks have three incredible advantages when they go into their own databases for leads.

First, existing customer databases usually have accurate contact information. Rarely do we serve consumers we can’t reach, unless they are off the grid and trying to avoid any sort of NSA surveillance.

Second, mortgage companies are likely to have permission to contact their existing customers as well as to market to the databases of their affiliates. This circumvents a lot of red tape that makes it difficult to reach out to people you don’t already have a business arrangement with.

Finally, consumers are more likely to respond when their bank or mortgage company contacts them. So the only question that remains is how do you know who to call?

One great answer to that comes in the form of the data mart. While the bank has contact information and permission to call the prospect, other databases, both online and off, hold the clues to the borrower’s current behavior. By monitoring a bank’s portfolio for these clues, the originator can tell when a prospective borrower enters the buy zone.

By using data mart approaches, you can find borrowers who likely have the credit and equity in their property required to get a new loan. If you are a bank, you can find deposit customers who have NO mortgage, but are likely to be searching for a new home. These first time homebuyers are a growing segment of the market and represent real opportunities for outreach from a trusted bank. You can find out if borrowers have email addresses or are active on social media, and use those methods to increase conversion.

Leveraging a data mart and paying attention to the consumers the originator is already working with can go a long way toward increasing the odds of conversion. And you don’t even have to work for the NSA to do it.

Find me on linkedin or email if you would like to discuss this in more detail. Or just talk to your coworker or write an email to a colleague. With my access to databases, I may just end up listening into the conversation anyhow.

Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.