Home sales are still lackluster, but FirstBank in Lakewood, Colo., is ramping up its mortgage lending as if immune to the weak demand.
It even opted to tout mortgages in a new advertising campaign this summer. Rather than the more common tactic of highlighting rates, the humorous ads focus on how FirstBank takes the hassle out of getting a mortgage.
In a 30-second television spot, a man exits a business called "House of Mortgages" carrying a stack of paperwork. "From time to time, the process of obtaining a mortgage can be somewhat stressful," says a voiceover, as the guy, now seated on a bus, suddenly starts screaming and ripping fistfuls of hair from his head.
"But it doesn't have to be," the voiceover concludes, after the bad behavior gets progressively worse. "Introducing the anti-pull-your-hair-out-steal-a-bus-and-jump-in-front-of-it mortgage. Only at FirstBank."
Koger Propst, who oversees the bank's mortgage division, doesn't consider the timing of the campaign counterintuitive. Over the past three years or so, mortgage volume at FirstBank has grown by about 15 percent to 20 percent annually on average. In the first half of this year, originations rose 50 percent compared with the same period last year.
"We're definitely bucking the trends," Propst says. He attributes this to having a "straightforward" product offering. "Our goal isn't to be the absolute market leader in rate," he says. "Some of the other aspects of a loan—the lack of complexity, understanding the pricing, dealing with lenders who make the decisions—also have real value in the marketplace."
The campaign, which includes print, outdoor, transit and online advertising along with the television spot, is all about mortgage customers having a better experience and uses the tag line, "Mortgages Made Easy."
One ad appears only on the side of bus shelters, and therein lies the humor. It has a "For sale" sign, offering a "Quaint open-air studio, downtown, convenient to public transportation." The text below reads, "Buying a home can be deceiving. Applying for a mortgage shouldn't be."
A newspaper ad reads, "Our mortgages are straightforward, to the point and without superfluous words and jargon that have no reason for being there except to confuse you and sneak something in, banana, that you might not notice." And a billboard says, "Sorry procrastinators, our mortgages close on time."
Jeremy Seibold, the associate creative director at TDA_Boulder who helped create the campaign, says FirstBank wanted to appeal to all types of homebuyers, from first-timers to investors. So poking fun at the process of getting a mortgage made sense, because anyone can relate.
"It's supposed to be a dream come true. But it turns into signature after signature and you end up getting delirious signing things and not knowing what you're signing," he says. "We're saying, 'We're going to make it a little bit better and get you through it.'"
Propst says FirstBank's capacity to hold mortgages on the balance sheet is a competitive advantage, particularly as the inability to securitize loans thinned out the competition. Roughly 25 percent of the bank's $10.7 billion in assets are first mortgages.
Those loans held up well too, despite the economic turmoil. Industry wide, past-due mortgages, ranging from 30 days late through foreclosure, are at about 10 percent of overall volume, compared with 1 percent for FirstBank, Propst says.
He contends this is partly because the bank has long considered mortgages a linchpin product. "This is a product that is for our bank customers. We're not just looking for a mortgage loan. It's part of the relationship," he says.
Peter Mitchell, the president and CEO of the advertising agency Woodbine in Winston-Salem, N.C., says the FirstBank campaign touches on a theme that is likely to resonate with consumers. But he thinks the bank could improve its message with more details on how FirstBank actually makes the process easier.
"Anyone who has applied for a mortgage recently has experienced the painstaking process, the endless paperwork and the rounds of approvals. FirstBank's promise of 'Mortgages Made Easy' is certainly relevant," he says. "The real issue pertains to believability. Can they deliver on that promise?"
