NMP - November 2019 - 18

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Purchase Pipeline Fuel
Part 1:
First-Time Homebuyers
By K. Justin Restaino

L

NOVEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

18

enders and brokers who rely heavily on purchase
business typically have loan officers who cultivate
from a large base of real estate agents. So ...
how does one without such a resource use direct
mail to generate more purchase business for
themselves and feed their real estate agent
relationships?
Identifying consumers who are actively pursuing prequalifications is the most immediate way of fueling your
pipeline with borrowers in search of a new home, often
referred to as "Purchase Triggers." Leads generated from this
approach allow you to approach your real estate agent
relationships with active buyers looking not only for a loan,
but for a home.
Flagging those who have had their credit pulled, you have a
higher opportunity of them being first-time homebuyers, along
with being credit-qualified. More than 10 years of market
research has shown these borrowers to be highly receptive to
offers that allow them to explore their options, so by
contacting them with a mailer displaying the benefits of using
your lending institution gives them more to consider than
what they might find online.
We conducted a 12-month demographic study that
revealed borrowers in the lower FICO ranges (580-699) are
typically light on downpayment funding, yet are extremely
loyal to the lender that does the most to help improve their
situation and/or offer the fastest track to homeownership.
Their response and conversion rates are stronger than higher
FICO ranges. However, the incubation period from lead-toclose is in the 90- to 180-day window range. An unintended,
albeit positive consequence, is that these borrowers have a
much higher referral rate for future business than their highscored counterparts, thus generating more leads from just
one responder.
Our same study learned that shoppers with scores
exceeding 700 tend to move rapidly with their homebuying
process by making the rookie mistake of first submitting an
offer prior to loan approval. While pricing remains a highlight,
we found that these borrowers are most receptive to lenders
with fast turn-around to stay in line with contract deadlines.
While the response on these borrowers captures 80 percent
of what the low FICO generates, these applicants move
rapidly through the loan process, giving a return within 30
days of securing the lead.
Next month in Part II, we'll review how to properly utilize
those who have recently listed their homes on the MLS as a
lead source for you and your real estate agent partners. Until
then, stay positive and I'll see you at the top!

For nearly 20 years, K. Justin Restaino has
provided the most effective turn-key marketing
campaigns with direct mail for the mortgage
industry. After a two-year hiatus to originate loans
first-hand, he's even better equipped as director
of marketing and business development at
Redstone Print and Mail to give his clients the
guidance needed for repeatable marketing efforts.

SPONSORED EDITORIAL

NMP NEWS FLASH
continued from page 16

banks and all digital lenders,
although mortgage lenders have
reported a significant drop in
foreign transactions.
"The trends we have identified
represent the challenges
surrounding identity verification
and authentication while trying
to provide a smooth customer
experience," said Kimberly
Sutherland, vice president for
fraud and identity management
strategy at LexisNexis Risk
Solutions. "However, firms
utilizing a multi-layered solution
approach could realize up to an
approximate 30 percent
decrease in their cost of fraud,
which is significant. And with
digital identity intelligence and
behavioral biometrics layered in,
firms can expect to lower the
true cost of fraud even further."
The report's findings are
based on a survey of 205 risk
and fraud executives in financial
services and lending companies,
including retail and commercial
banks, credit unions,
investments, trusts and wealth
management, as well as auto
lenders, mortgage companies,
finance companies, and nonbank credit card and personal
loan issuers.
Redfin Study: Homeowners
Remaining in Homes Longer

The average homeowner spends
13 years living in their home,
according to new data from
Redfin. This is up from an
average of eight years in 2010.
Redfin analyzed 55 metros
and determined that
homeowners have been in their
homes the longest in Salt Lake
City, Houston, Fort Worth, San
Antonio, and Dallas, with
residents in those metros
remaining at the same address
for more than 20 years on
average. In many markets,
municipal policies that reduce
property tax burdens for senior
citizens are making it more
affordable for seniors to stay in
their homes longer.
However, the lack of turnover
is contributing to inventory
shortages, especially in regard
to affordable homeownership

opportunities. For example, the
median Redfin Estimate for San
Francisco homes where the
resident hasn't changed in over
20 years is about $122,000 lower
than the median Redfin Estimate
for homes where the resident has
changed in the last five years.
VA Refunds $400M
in Home Loan Snafu

The Department of Veterans
Affairs (VA) has announced the
issuance of more than $400
million in refunds to home loan
borrowers.
According to the VA, the Loan
Guaranty Service (LGY) program
identified more than 130,000
loans where a refund was
potentially due. In a statement,
insisted that "while some funding
fees charged were found to be
attributable to clerical errors,
most fees were charged
correctly. The exception was for
those veterans whose exemption
status changed following the
issuance of a disability rating
after the closing of their loan."
"VA staff worked diligently
throughout the summer reviewing
130,000 cases, which is an
average of 16,000 loans reviewed
per week," said VA Secretary
Robert Wilkie. "This effort
included loans dating back nearly
20 years. Our administration
prioritized fixing the problems
and paid veterans what they were
owed."
Your turn
National Mortgage Professional
Magazine invites you to submit any
information on regulatory changes,
legislative updates, human interest
stories or any other newsworthy
items pertaining to the mortgage
industry to the attention of:
NMP News Flash column
Phone #: (516) 409-5555
E-mail:
Newsroom@MortgageNewsNetwork.com

Note: Submissions sent via e-mail
are preferred. The deadline for
submissions is the 1st of the month
prior to the target issue.


http://www.NationalMortgageProfessional.com

NMP - November 2019

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Contents
NMP - November 2019 - CT1
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NMP - November 2019 - Cover1
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