Banks are insolvent, foreclosures and REO’s are up 100% this year, and the mortgage Implode-o-meter continues to grow at a frightening rate. Many of us knew that this was coming, the housing bubble had to burst at some point and the industry that has served us all so well has receded a great deal since early 2007. As many have pointed out there continue to be opportunities out there for savvy mortgage companies and the industry that remains in place today is fundamentally stronger and of a higher quality than ever before. There’s been a necessary clear out of the were in it for a quick buck, that cared less about the consumer. The companies that remain today are more ethical, and more focused on efficiency and best practices than ever before. At Leads360, where we are focused on enabling mortgage best practices, in some ways it’s actually been a good thing. We’ve been one of the few companies in the industry to grow during this downturn and the customers that we have lost have not tended to be the ones that were prepared to fully embrace best practice sales efforts.

But the really big question is when will the industry return to what it was? I believe the answer is that the next 6-9 months are going to be very tough (perhaps tougher than the past 9 months), that a rebound will occur in about a year and we’ll likely see a return to a very buoyant mortgage (re-fi) market in mid-2010. I base this view solely upon the forecast ARM reset schedule for the next 3 years (see below; we are currently in month 18). According to this data what we’ve primarily seen over the past year are subprime ARM resets. This has been a key driver of the current foreclosure/subprime crisis. My belief is that given what else is occurring in the macro-financial ecosystem, the non-subprime market is what will drive mortgage company profits for the next decade. Given this the ARM reset schedule suggests a significant upturn in demand for these products, in around 12 months time.So if I am right, or partially right, what should we do now? The answer is probably more of what we have been doing. As an industry we need to continue our relentless focus on the bottom line. Operational efficiency is key to success and this frankly begins and ends with savvy marketing focused on increasing ROI from less spend. Mortgage companies need to focus on the highest return marketing channels of which Internet lead buying (the highest ROI marketing medium) should be a key component. Beyond buying Internet leads, companies should focus on working them effectively to maximize their conversion… to this end anyone without a Lead Management System should consider adopting one.

Tags: Lead Management