Author: Hartley Pinn
There are several benefits to focusing on subprime mortgage leads. One good reason for generating subprime mortgage leads is that the borrowers are less likely to shop your offer. Also, the commissions on subprime mortgage loans can be quite lucrative.
I've found that one of the best ways to generate subprime mortgage leads is by direct mail.
So let's look at the steps involved in putting together a profitable direct mail campaign to generate subprime mortgage leads.
Prospect List
There are two sources I recommend for obtaining your mailing lists - list companies and credit agencies.
Here are two sample criteria to request from list companies in order to target subprime borrowers:
1) Get a list of home owners who have just filed a chapter 13 bankruptcy. Do a cash out refinance and pay off their chapter 13 bankruptcy.
2) Get a list of people who originated a loan with a subprime lender at least 2 to 5 years ago. Their pre payment penalty will be expired and they will be ready to refinance.
Here are two list ideas when working with a credit agency to obtain your subprime mortgage lead mailing list:
1) Find homeowners who need help with their finances. Get a list of homeowners who are currently 30 days late on their first mortgage loan. Or, get a list of home owners who have a certain number of consumer lates 30, 60, or 90 in the past 6 to 12 months.
2) Select borrowers with a low credit score. You select the credit score range based on your loan programs.
Combine these with other criteria to better target your prospects. Here are two more list criteria ideas:
1) Homeowners with $15K to $50K outstanding revolving debt 2) Properties that have an LTV of 80% or less
Mail Piece
Here are a few important basics you'll need to incorporate into your mail piece:
Personalized content
* Give sample payments. * Tell them how much money the new loan will save then monthly and over the next 5 years.
Tell them about your unique selling propositions (USP's)
* 1% mortgage loan options * No closing cost options * No payment for 2 months * Are they already approved? If so, let them know in the letter
Be sure to comply with the state banking regulations in your area. Include the following in your mail piece:
* Equal housing lender logo * State license number * Disclose APR's
Share some personal information about yourself under your signature
Your title Years in the mortgage business Awards you've received Degrees or certifications you've earned Hobbies Interests
Here are examples:
Your Signature
Your Name
Senior Mortgage Planner 10 Years Mortgage Experience Licensed Financial Planner Married with 3 children Single mother of two Youth basketball coach
To get a complementary refinance letter that has produced more than $2,500,000 in mortgage commissions over the last 12 months visit:
http://www.Mortgage-Leads-Generator.com/a/refiletter.htm
Use Split Testing to Improve Your Conversion Rates
Now that you have a list of prospects and a mail piece, it's time to mail. The secret to direct mail success is testing. If you test different elements of your direct mail campaign, you will find ways to increase conversion rates. Over time, you will have a mail campaign that will generate huge returns.
How to conduct Split Testing
Instruct your printer to separate your list into 3 groups:
1) Group 1 will be 80% of your list 2) Group 2 will be 10% of your list 3) And group 3 will consist of the last 10% of your list 4) Make sure the groups are randomly selected
Next...
1) Mail your original letter to group 1 2) Make ONE very small change to the original letter and mail it to group 2 3) Then, make another very small change to the original letter and mail it to group 3 4) Track your results and see which version of the letter had the highest number of calls, applications, loans originated and loans funded. 5) Make the winner your original letter and start all over again
Do you see what you have just done? It's called split testing. If you do this consistently, you can continue to increase your conversion rate, get more leads, fund more loans and make more money!
Here are some ideas for changes:
* Use a website address instead of a phone number * Use a website address with a phone number * Add a heading * Change one paragraph. * Experiment with the PS * Offer a coupon or something for free (appraisal, processing, etc) * Add Red Headlines to your letter * Use different envelopes * Talk about different and unique USP's
Be sure to only make one small change at a time. If you make massive changes you won't know what specific change affected your conversion rate.
Don't underestimate the power of this testing. If you mail 2,500 letters a week, a 1% increase in response will give you an extra 25 calls per week. That's an extra 100 calls per month. At a measly 10% conversion rate, that's an extra 10 loans per month.
That could easily equate to an extra $50,000 to $90,000 in commissions every month!
I am confident that a strong direct mail campaign will help you generate more subprime mortgage leads. Try these tips and you'll be amazed at your results!
Please feel free to reprint this article as long as the resource box is left intact and all links are hyperlinked.
Hartley Pinn has recently created the ""Mortgage Leads Generator"" Training Course to teach mortgage loan officers 10 proven strategies for generating more than 71 mortgage leads per day.
About the author: As a top producing mortgage loan officer, Hartley Pinn has been actively testing, researching, and evaluating lead generation strategies since 1995.
Mr. Pinn has written several articles on the subject and has recently created the ""Mortgage Leads Generator"" Training Course to teach new and experienced mortgage loan officers how to generate a five to six figure monthly income while cutting their work schedule down to only 10 hours a week.
