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Archive for December, 2007

Americans are split on the ‘mortgage bailout’

Wednesday, December 19th, 2007

I don’t know if this surprises me or not. Like so many other hot topics in the news today, Americans are split pretty much down the middle. No pun intended. Read all about it here.

“Americans are nearly equally divided on whether those facing defaults on their mortgages should get special help, with most believing the borrowers are to blame for their own problems.”

Special treatment for those ‘caught’ in bad loans and facing foreclosure. A novel idea. To whose expense will this fall though? Personal opinion of the specific matter aside, moving forward there is a need for accountability on all levels. Can you place blame on the lenders, the brokers, the loan officers, the appraisers, the account executives, the processors, and…umm, don’t forget the borrowers? Sure you can. To what degree can you assign blame to each? It’s questionable and I am sure we would all come up with different looking pie charts. At the end of the day, accountability will keep us from cycling back through this again in the future, that is for sure. To whom do we need to be held accountable? Another one I don’t want to touch, but the fact remains that the lack of oversight and accountability is about to cost someone, somewhere, a whole lot of money.

So the Fed decides to regulate lending… questions aplenty.

Tuesday, December 18th, 2007

The New York Times reported today that the Fed Board of Governors has voted unanimously to implement lending regulations to avoid predatory lending practices (and a second sub-prime fiasco). I think this regulation is actually aimed at the banks (to eliminate the riskiest tranches of future mortgage securities) but just framed in the name of protecting the consumer. This proposed regulation has the potential to impact borrowers, lenders, and lead generators to a significant degree.

The proposal includes four key protections for “higher-priced mortgage loans” secured by a consumer’s principal dwelling:

  • Creditors would be prohibited from engaging in a pattern or practice of extending credit without considering borrowers’ ability to repay the loan.
  • Creditors would be required to verify the income and assets they rely upon in making a loan.
  • Prepayment penalties would only be permitted if certain conditions are met, including the condition that no penalty will apply for at least sixty days before any possible payment increase.
  • Creditors would have to establish escrow accounts for taxes and insurance.

The rule would define “higher-priced mortgage loan” to capture loans in the subprime market but generally exclude loans in the prime market. A loan would be covered if it is a first-lien mortgage and has an annual percentage rate (APR) that is three percentage points or more above the yield on comparable Treasury notes, or if it is a subordinate-lien mortgage with an APR exceeding the comparable Treasury rate by five points or more.

The following protections would apply to all loans secured by a consumer’s principal dwelling, regardless of the loan’s APR:

  • Lenders would be prohibited from compensating mortgage brokers by making payments known as “yield-spread premiums” unless the broker previously entered into a written agreement with the consumer disclosing the broker’s total compensation and other facts. A yield spread premium is the fee paid by a lender to a broker for higher-rate loans. The consumer’s written agreement with the broker must occur before the consumer applies for the loan or pays any fees.
  • Creditors and mortgage brokers would be prohibited from coercing a real estate appraiser to misstate a home’s value.
  • Companies that service mortgage loans would be prohibited from engaging in certain practices. For example, servicers would be required to credit consumers’ loan payments as of the date of receipt and would have to provide a schedule of fees to a consumer upon request.

The proposed revisions to TILA’s advertising rules require additional information about rates, monthly payments, and other loan features. The amendments also would ban seven deceptive or misleading advertising practices, including representing that a rate or payment is “fixed” when it can change.

Under the proposal, creditors would have to provide a good faith estimate of the loan costs, including a schedule of payments, within three days after a consumer applies for any mortgage loan secured by a consumer’s principal dwelling, such as a home improvement loan or a loan to refinance an existing loan. Currently, early cost estimates are only required for home-purchase loans. In addition, consumers could not be charged any fee until after they receive the early disclosures, except a reasonable fee for obtaining the consumer’s credit history.

The Federal Reserve has engaged in extensive outreach efforts with consumer groups, the financial services industry, lawmakers, and others to ensure that the proposed rules are likely to achieve the goal of protecting consumers from unfair practices without shutting off access to responsible credit. The proposal takes into consideration testimony given at four public hearings the Board held in the summer of 2006, and a hearing held in June 2007, as well as public comment letters received in connection with those hearings. The Board also consulted with other federal and state agencies and its own Consumer Advisory Council.

The Federal Register notice is attached. The comment period ends ninety days after publication of the proposal in the Federal Register, which is expected shortly. Read all of it here.

So what does this mean for you the borrower, lender, broker, or lead generator?

The devil is surely in the details.

- How will the standards be enforced?

- What will be considered “evidence” of ability to repay? Will qualified consumers be willing and able to meet these standards? Will unqualified consumers be able to meet these standards?

- What will be considered sufficient “verification of assets”? Who will do the verification? Who will be the first major lender to get caught looking the other way?

- Will reduction of prepayment penalties significantly change product offerings?

- Will the forced establishment of escrow accounts for taxes and insurance significantly change the product offerings? Is this even legal? What will the threshold be?

- If yield-spread premiums are eliminated who will benefit and who will be hurt under a flat compensation plan? Will this regulation be easily avoided by burying disclosure in the fine print?

Take Lead Nurturing to the Next Level

Friday, December 14th, 2007

This is a guest post from marketing automation expert Jason Kort.

An important aspect of lead nurturing is marketing automation. Lead Management Systems offer basic automated communications but many companies should look to take their nurturing efforts to the next level.
Since not every lead closes on the first contact attempt, integrating a marketing automation platform, such as softvu SoftVu, into a company’s lead management approach can help clients nurture leads with relevant, timely, and engaging multimedia messages to help build competitive differentiation, brand awareness, business credibility, and product understanding.

These messages are all automatically “triggered” by a lead management system like Leads360, by certain actions taken by salespeople, or a time trigger (such as 10 days after product or service inquiry). Some clients set up a series of campaigns that cover up to 36 months of lead nurturing messages. These nurturing campaigns help produce more deals from your leads, significantly increasing ROI.

Keep your sales team focused on high probability leads.

The real value of automating these and other critically important but tedious sales tasks is that your sales people now spend their time working only high-probability, leads who are already open to a conversation or even ready to close.
With top of the line marketing automation you can produce more “hot leads” from your pool of old leads.. So, instead of just skimming the top of the pile, your sales team touches every prospect with regular, relevant communications, knows who to call when, and closes more sales.

How do they know who to call when?

SoftVu’s communications platform sends a view notification the instant your prospect views a message. SoftVu view notifications include details about the message and the viewer so you can respond immediately—a great strategy since your prospect is clearly interested, probably near a phone, and has time to talk. This notification will automatically notify a salesperson through their LMS and in Leads360’s case can even automatically dial the lead through the Leads360 LeadDialer.

And beyond real-time view notifications, the SoftVu system tracks your sends and views and writes all activity back to your LMS, providing clear information you can use to prioritize your calls.

Marketing automation and lead management, a powerful combination

Lead management keeps your salespeople organized and effective, while marketing automation helps reach those prospects that you just can’t get over the phone.
Together a lender can maximize their conversion rates.

Share your closing ratios with your lead providers…

Friday, December 14th, 2007

The Lead Critic made a very good post earlier this week about sharing data with your lead providers. As a lead management system company, obviously we have a good idea of overall performance. I say overall performance because it would be unfair of me to say lead performance, because a lead is only one ingredient in the mix. More on that some other time…

From 2004 - 2006 I spent my week days selling mortgage leads to loan officers, brokers, and lenders from coast to coast. I sold leads to the mom and pops shop around the corner, and to a handful of the largest direct lenders in the nation. Out of well over 100 clients, only a few of them would share data with me. How many loans have you closed out of the leads I sent you? What is your contact rate? What is your application rate? How about speed to contact, how long does it take you to respond to a lead on average? Getting an answer was like pulling teeth. I think it was a mix of “I don’t want to tell you I’m doing great because you’ll jack my prices up” and “I don’t want to tell you my metrics because I am afraid others are doing way better and I don’t want to hurt my ego.” Whatever the reason, my intention for asking was simple: With your information, I can make my product better.

It’s almost 2008, advertising online is pretty mature, and it is easy to tell what campaigns are producing quality leads, and what campaigns are not. But the only way for a lead provider to know what campaigns to target is to tell them what is working, and what is not. Just so you understand how this works, most lead providers that I know of can target a specific lead back to it’s specific source. Let’s say that a lead provider has 250 campaigns running at any time online. If you send them a list of leads that were pure crap, they can track them back to where they originated. If most of them came from a specific campaign, they can pull the plug on that campaign and end your misery.

Let’s go out on a limb and say that if you do share this information, and the product gets better, your prices DO go up. So what? You’ll be closing more loans, you’ll keep your loan officers happier and more amped to get on the phone with a lead faster, and at the end of the day your life will be easier. So you spend a few bucks extra per lead, it’s not the end of the world. When a lead provider is able to produce better leads, you’re going to win in the end, but if you do not share this information, you’re only going to shoot yourself in the foot chasing not so great leads around. The rewards severely outweigh the risks in this scenario. Do yourself a favor and tell your lead provider how you are doing. If you’ve ever filled out a survey after buying a car, a large TV, or even called one of those “How Am I Driving?” 800 numbers, you’ll know why…

Are you ready to fastpitch your startup?

Tuesday, December 11th, 2007


 Benjamin Kuo of socalTECH.com wrote about the upcoming fast pitch event that we were honored to participate in last year.

Tech Coast Angels is now taking applications for their Fast Pitch event coming up in January. For entrepreneurs who aren’t familiar with what a “fast pitch” is, it is a very short, 60 second “elevator pitch” on your company. The idea behind the competition is to pit a number of entrepreneurs — all looking for funding — in a competition to see who can best convince an investor to make an investment in their company. It’s very informative, entertaining, and actually a useful skill to have. Visit socalTECH here.

You can listen to Leads360′s winning pitch from last year here, courtesy of Frank Peters.

Working on pitching your company can be a big drain on your day to day resources that you need to devote to your business.  It is tough to pry yourself away from the daily grind to focus on the big picture, do the research, make the right connections, and have the important conversations.  Yet, we find an enduring value to the big conversations as they continue to give us new insights into how to mold our product and consulting services to better meet the needs of our clients.  There is always room for us to improve the performance of our customers and that means devoting time and energy to new ideas.

We highly recommend competitions like Pitch the Angels because they represent a great chance to explore the big ideas which are integral to your business.  You will have the opportunity to talk through your ideas and be confronted with things you may never have thought of.  Don’t be afraid to pitch!

Current and Past Clients, your best source of business…

Thursday, December 6th, 2007

Do you have a marketing strategy in place to touch past clients? How about current ones? Are your current clients aware of your new products and technologies? What are you doing to keep your product[s], your company, and most importantly YOU, on their mind?

The easiest, most trouble-free, and best business is return business. It is relatively simple to get if you know how to get it, and it breeds new referral based business.

Furthermore, what’s the easiest way to lose business to a competitor? Become just another part of someone’s day. Become a nameless, faceless feature of someone’s operation. This makes it easy for your competitors to walk right in, and kick you right out.

What are you doing right now to keep in touch with people whose trust you have earned in the past? Let’s talk about it. E-mail me at or call me at 310.256.2947 so we can discuss some Best Practices.