Having prepayment problems? Chances are someone like Brad Kent is to blame.

Mr. Kent, 32, is the chief executive of Smart Leads, one of a growing number of companies that help clients identify and market to borrowers who are in a position to refinance.

In recent months, competition has been blamed for higher-than-expected prepayment rates that have forced several lenders to take massive writedowns-and Smart Leads has done its part to fuel that competition.

Mr. Kent, a former Chase Manhattan Mortgage manager, founded Smart Leads in late 1996.

The company has helped more than 100 lenders increase volume by targeting competitors' portfolios.

Mr. Kent said his company could just as easily be helping lenders to retain customers.

The best defense is a good offense, Mr. Kent said.

"Does it behoove (lenders) to churn their own accounts? If they don't, someone else will. You have to go out there aggressively and compete for market share," he said.

Lenders need to take a proactive stance to keep prepayment rates under control, and should be taking a good look at any loans that are more than 12 months old, Mr. Kent said.

Midsize high-loan-to-value and subprime lenders are the Clearwater, Fla.-based direct-mail marketer's best customers. The firm uses lists culled from county records to find refinancing-ready borrowers and then helps to guide lenders through the sales process.

"We control the entire direct-mail marketing scenario," Mr. Kent said. "From hiring the loan officers to making sure they are trained properly, to data selection, creating the mail piece, and planning geographically where to drop it."

Smart Leads favors a back-to-basics approach, he said, emphasizing strong sales skills rather than highly specific data mining.

"Companies have outsmarted themselves in their push to use psychographic data," he said. "We're not convinced that that is the way to go."

Instead, Smart Leads concentrates on who answers the phone calls, Mr. Kent said.

The company uses a 110-question personality profile to find potential salespeople for lenders.

"We prescreen to find people that are not telephobic," Mr. Kent said. The best candidates are typically "high-energy, focused individuals who love the telephone and love people."

After lenders hire Smart Leads' picks, the company provides preliminary training sessions run by co-founder with Jack Davis, a 25-year mortgage sales veteran, and then follow-up courses every eight to 10 weeks.

"If mortgage companies would spend less time trying to selectively target borrowers, and more on the training and sharpness of loan officers, they'll close more loans," Mr. Kent said.

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