Real estate is as hot as Internet stocks were in 1999, and while debate rages on whether current investments in the housing boom will eventually face the same fate as investments in Web-based pet food retailers, what's certain is mortgage lenders are currently awash in one of the best markets in decades-and they're arming themselves with the latest tools to lure new customers.
The plays are varied, such as The Loan Page's partner program with high-trafficked Web sites, and Credit Plus' availability of pre-screened or credit-based lists to help lenders pre-qualify mortgage candidates. For some of the industry's giants, such as multi-billion dollar-originators like Wells Fargo and Wachovia, Web chats and co-browsers are being used to attract greater attention, put inquisitive borrowers' minds at ease, and, most important, get the applicant through the door.
Nabbing a new mortgage customer is a big win for a financial institution-the loan is relatively large, and it can give the bank an instant multi-year relationship upon which to cross-sell other products. But home loans are the most complex and intimidating financial commitments that consumers enter into in their lifetimes. The on-line chats are a way to provide handholding.
"The chats have been very helpful," says Joan Sommerer, vp of direct lending solutions for Wachovia, a $22 billion originator which gets about 10 percent of its mortgage business from the Web. "It gives consumers validation. Sometimes they want to have an understanding of how the mortgage will work, and they often want to do that without having the pressure of a salesperson."
Wachovia's been offering Web chat in the mortgage portion of its Web site since a pilot program in the fall. It added a co-browsing tool in October. Both have become a key element in the huge lender's customer acquisition strategy, as Sommerer says that much of the chats occur prior to the application stage. "The customer wants clarification and verification that they're on the right path."
The chats have been a success for Wachovia, who says customers who participate in on-line chats are 25 percent more likely to close their mortgage with the bank. The technology's also scoring high on the customer experience front, with Wachovia reporting that 86 percent of users surveyed found their chats to be "very positive."
"The mortgage application form is a big form, with lots of boxes and language that can be daunting to consumers," says H.A. Schade, vp of product management for KANA, which sold the software to both Wachovia and Wells. "The chat allows an agent to see exactly what the customer is seeing in real-time, so they can see what the customer has put into various boxes, or if the customer has neglected to fill out portions of the form. The agent can highlight certain areas, or make a comment or notation telling the customer what he needs to do. They're interacting so the consumer can see what's happening."
The chats work by placing a live agent on the institutional end to engage in Web discussions with prospective mortgage borrowers. (KANA also has non-mortgage financial services, telecom, government and health-care clients that use live chats.) Schade says the technology allows a customer service person or mortgage agent to handle as many as eight chats at once, though Wachovia limits its reps to one chat at a time in an effort to maintain as favorable a customer experience as possible. The answers to each question come via a rep's search of a knowledge base the institution creates that's part of the chat product, in an effort to produce answers and dialogue that's both standard and compliant for the most often-asked questions in the mortgage process.
Schade hopes the technology will prove popular with lenders of mortgages and other large loans that require a lot of shopping, research and consideration on behalf of the consumer. "You have an active customer there who has tens of thousands of dollars in the shopping cart; you want to make sure that customer has the best experience possible," Schade says.
Filling a lender's shopping cart with the proper customer based on the firm's credit needs is the impetus behind a new Credit Plus program that serves as a matchmaker between consumers and lenders.
The program involves Credit Plus retrieving borrower acquisition information from its own customers that are targeted for the service-a mix of mostly mid-level bankers, brokers and mortgage lenders. The questions include topics such as what the lender is doing to reach target customers from a promotional or marketing strategy. "We try to figure out what the broker's ideal customer looks like based on the attributes that are most attractive to the lender-whether it be subprime customers, or Alt A, or a conforming mortgage customer who has credit card debt," says Todd Zuerlein, regional marketing director for Credit Plus.
Credit Plus, which has a 77-year history in the credit information business, then leverages its long-standing relationships with credit repositories to access data-which it turns into lists of credit-based leads which are sent back to the lender. The data provided is scrubbed against the national Do Not Call List, and consumers are able to opt out of the list. When lenders or brokers utilize the live credit database, they are obligated to send firm offers of credit stating the consumer is being sent the prequalification based upon credit history.
Credit Plus is positioning the product, which has only been out for a couple of months, as an alternative to similar offerings from larger firms such as Ameriquest or Wells Fargo-only the Credit Plus product is aimed at smaller players. "We're looking at smaller banks, those who have only one location, all the way up to a multiple site, multiple branch institution," says Zuerlein, who would not divulge how many users the service has, or how many prospects had been provided to lenders.
Beyond the credit matching offered by Credit Plus, other firms are using cross marketing on the Web is as a means to produce targeted lead generation. The Loan Page, a Web-based mortgage lender, is embarking on a partner program that features marketing ventures with other Web sites. TLP is providing private-labeled mortgage centers to sites such as CNET's MySimon.com that connect consumers directly to TLP's lender network. Partners like MySimon, Forbes.com and WSJ.com pay nothing upfront, while TLP pays a commission for each visitor that clicks through to its lenders.
Consumers have the option of filling out quote request forms and obtain information from the MySimon site and automatically get the lowest rates from up to four lenders from a network of more than 150. TLP provides the tech platform, hosting, reporting and back-end fulfillment.
The lender's Web partners obviously drive the demographics of the potential borrowers, which is an aid in referring them to the proper lenders in the network. "We've got some lenders that are focused on a good credit rating, high refi values or minimum home values, or those who want low LTVs," says Kevin Akeroyd, president and CEO of TLP, which earned $15 million in revenue last year and is on pace to hit $20 million this year. TLP would not reveal how much the program was increasing lead generation, but Akeroyd did say the volume of lead generation was "doubling." "Rather than just going the affiliate route, we are trying to drive relevant targeted traffic to lenders in different ways."
