An experiment in understatement has earned Norwest Mortgage a raft of potential business.
The Des Moines-based lender pulled in more than 250 leads from a 4.5- inch newspaper advertisement it ran for a few weeks in a Boston-area daily this spring.
The ad offered to evaluate consumers' credit as a way of determining what kind of home they could afford. Executives at Norwest Mortgage Inc., which lends all over the country, chose a very modest start to see whether customers would take to the approach.
The results have been encouraging, said John R. Adam, a senior vice president at the mortgage lender.
People who call the advertisement's toll-free phone number have demonstrated a firm interest in buying homes and hooking up with a lender, he said.
Norwest was introduced to the advertising program by PMI Group, one of the mortgage insurers it uses when underwriting loans. The system takes down callers' financial information, pulls a credit report electronically, assesses borrowing ability, and forwards this information to the lender.
On the basis of initial results, Norwest plans to expand the program into New York, with ads in suburban publications and radio spots in Manhattan.
The company is also giving serious thought to a nationwide rollout using advertisements on a regional basis, Mr. Adam said.
Norwest is especially pleased that most of the callers are interested in buying homes, not refinancing mortgages, Mr. Adam said. Callers also are responding to the ad early in the homebuying process.
As a result, Norwest is able to strengthen its ties to realty brokers by referring callers to them, Mr. Adam said. "That's working very well."
Norwest's acceptance of the program bodes well for PMI, the mortgage insurer that offers it.
"These are things that make our customers more successful, which in turn earns us more business," said Tony Porter, vice president of marketing at the Fairfax, Va., company.
PMI contracts with an Atlanta telecommunications firm, Strategic Solutions Group, for the system. Strategic Solutions charges a $5,000 start-up fee and $5.95 for every lead its system turns up.
