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Refinance Lead Activity Jumps

The good news for mortgage professionals last week was that refinance lead activity rose to its highest level in over a year. Lead Planet chief economist, Kevin Grant announced Friday that refinance applications increased 5.9% to 2116.3. The overall rise in mortgage leads online crept up 6.6% from the previous week. Grant said that this was the most significant increase since May of 2009.” The Mortgage Bankers Association said in their report that the Refinance Index increased 12.6% from the previous week. MBA also indicated that the adjustable-rate mortgage share of activity decreased to 4.7% from 4.9% of total applications from the previous week.

The average mortgage rate for 30-year fixed-rate mortgages fell to 4.67% from 4.75%, with points decreasing to 0.96 from 1.07 for 80% loan-to-value (LTV) ratio loans. This is the lowest 30-year mortgage rate recorded in the survey since the week ending April 24, 2009. The effective interest rate also dropped from last week.

The average mortgage interest rate for 15-year fixed-rate mortgages dropped to 4.06 % from 4.19%, with points decreasing to 0.97 from 1.00 for 80% LTV loans. This is the lowest 15-year mortgage rate ever recorded in the survey. The effective rate also decreased from last week.

The average home loan rate for one-year ARMs was unchanged at 7.05%, with points remaining constant at 0.27 for 80% LTV loans.

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Comparing Internet Mortgage Leads to Trigger Credit Leads

I get some interesting questions from mortgage marketing executives from time to time.  Today a representative from one of the larger banks asked me to compare internet mortgage leads to trigger leads.  This person was told that trigger leads have a better conversion ratio and so they wanted to know why they wouldn’t want to shift their mortgage marketing dollars.  I decided it would be a good idea to discuss the benefits and risks of both internet loan leads and trigger leads.

Online Mortgage Leads Versus Trigger Leads

I decided it would be a good idea to discuss the benefits and risks of both internet loan leads and trigger leads.  First of all for those that do not know, a trigger lead is a lead that is generated when a loan applicant has their credit pulled.  The credit report company sells the lead to a mortgage company that meets those credit filters.  The big problem for the mortgage company buying the trigger lead is that the loan applicant does not know who they are and usually they are not happy with some random company calling them without their consent.  Any way you cut it, loan applicants are blind-sided by the mortgage company who bought the trigger lead.  It is pretty shocking that trigger leads are legal.  I don’t see how it is any different than buying a spam email lead.  Both trigger and spam leads are generated in some part without the loan applicant’s authorization. 

On the other hand, internet mortgage leads are initiated by the loan applicant. Think about it — the borrower goes online and searches for mortgage companies to help them with a refinance or purchase mortgage.  Once the loan applicant submits their request to be connected to multiple lenders the internet mortgage lead is created.  The loan applicant is now expecting a phone call and email from the loan company who purchased the mortgage lead online. 

Trigger leads can be effective, but they require a very clever loan officer to get good results.  Most loan officers are not able to overcome the typical objections that come with the trigger leads.  It is much more likely to get better conversions with internet mortgage leads because the borrower is expecting your call.  Lead Planet is a direct mortgage lead company offers quality internet and live transfer mortgage leads.  We do not offer trigger leads.

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Evaluating Mortgage Lead Quality

One of the most important tracking measures for mortgage leads is to evaluate the lead quality.  It is imperative that every month you reflect on the lead quality for the mortgage leads you purchased.  Ask yourself these questions when tracking lead quality:

1.  What was the contact rate for these purchased leads?

2.  What was the qualification rate for these mortgage leads?

3.  How many leads turned into loans in process?

4.  Did I fund loans from these leads?

Not all leads will work.  Good looking mortgage leads can be bunk and poor looking leads can turn into a closed loan.  According to mortgage broker, Matt Henry, “Lead Planet more than any other lead company addresses small lenders’ primary need of funding more loans.”

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