LEADCRITIC

How easy is it to let the simple things in our businesses slip through the cracks?

I bring this up because of an email I received a few weeks ago. The sender was looking for advice on lead buying and I caught myself starting the email saying, “Buying leads is very simple…”. And in fact it is very simple, however the problem with that statement is not the fact that I said it was simple, it was the fact that I had become complacent.

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Happy New Year to everyone. I feel pretty good about the fact that I get to begin 2009 with an upbeat piece. What I am referring to is an item in the news that I am hoping is an early indicator as to the coming rebound of the financial system. I know I may still just be trying to be the eternal optimist, but I have to think that the following story is a good sign.

What I am referring to is, the report that IndyMac Bank is being sold to a group of private investors consisting mainly of private equity firms (i.e., hedge funds) as the bank is emerging from FDIC control.

IndyMac was the largest bank to fail in this current credit crisis and the third largest ever since the government began insuring deposits in 1934, according to the LA Times article cited. IndyMac was also one of the pioneers of the “exotic home loans,” that have been largely blamed for the current credit crisis; the no income documentation, variable interest rate loans, and Alt-A products.

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Boy, I can’t believe the year is almost over!

What a year 2008 it was. The mortgage and real estate industry continued to tank. Many of you changed your business model, entered new verticals and switched companies altogether. More companies went out of business and other opened for business for the first time. Mortgage guidelines tightened, banks stopped lending to each other and more recently rates dropped to all time lows, even just for a second.

The first African American was elected President, many are finding new life in new verticals and many were forced to optimze their businesses that were long over due.

It has been an amazing year no matter how you look at it and 2009 will be equally as amazing.

I want to wish you all a happy Holidays and thank you for being a loyal reader despite our possibly differences in opinion and having to put up with my horrible writing skills. Your participation and opinions have added more to this blog then any one post. So, thank you!

Happy Holidays!!

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Last week we briefly discussed lead volume per sales agent and more specifically how many leads each agent should have in their pipeline at any given time. This question is first in a number of lead management questions you should answer prior to starting another day of business.  There should be a number of business rules that should resonate with everyone in your company. The first we touched on last week and that is to call each lead 3 times a day until the lead is contacted. Another rule that you will need to create has to do with the life a lead in your system.

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According to F***edStartups via our new friend LeadTwit Experian has laid off another 20+ people. Nothing new or exciting about the news and in fact much of the same old same old and very depressing for most.

Jay Weintraub posted some interesting commentary today that briefly touched on the depressed Internet ad budgets of companies today. The decreasing of ad spend for the finance industry started over a year ago and in hindsight was a precursor to all the industry layoffs and cutbacks. It doesn’t matter how resilient you think certain companies may be, they will be affected too. The mortgage industry is being pigeon holed by the strict loan guidelines and is effecting the marketing strategies that have been firmly planted in lead generation companies for years. The increased amount of unwanted and unsold inquiries are taking affect on the size of each company.

It is my thought that these larger companies with less ability to be flexible are the companies that are being hardest hit.

Its too bad, really.

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I had a great conversation the other day on the topic of lead volume per agent/ loan officer. The discussion evolved from the question I asked regarding how many leads each agent had in their pipeline at any given time. The answer was 150  to 200 leads. Based on my experience that seemed like a lot of leads to be in one agents pipeline and they couldn’t possibly be working all those leads properly. Each agent at this company was required to price out and process each loan they received and in many cases were not able to call leads while performing these duties.

What is the correct amount of leads an agent should have in their pipeline at any given time? I think this is a question that is often overlooked and is usually answered with a simple guess, but I am going to suggest something very trivial and that anyone can implement. Sometimes the simplest things are overlooked, but can have the biggest affect on conversions and ultimately your ROI.

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There has been a subprime-esque bubble growing in the world of loan modifications. I know of several shops that have moved almost entirely from originating loans to facilitating loan modifications for profit. Many lead providers have also started offering loan mod leads as part of their product quiver. The margins are not as good as a loan, but typically they are easier to do so you can do more loan mods per month than loans. The problem that I see, however, is that this bubble, too, is about to burst.

Loan mods were intended to be a compromise between banks and consumers to keep a loan from defaulting in a market that continues to decrease in value; it is a means of loss mitigation for banks. But there appear to be some cracks emerging in the dam. There was a very interesting article in the NY Times on Dec. 8^th. If you didn’t catch it, you can read it here. In short, most homeowners whose loans were modified during the first part of this year are falling behind on their payments once again. The article states:

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This is really simply too.

I have said it a number of times and I promise this will be the last. I talk to lead buyers every day that choose not to take leads on weekends, however typically I can talk them into taking the leads by telling them my many examples of how they convert better then leads during the week. I am getting tired of it, though. Yeah, I am tired of putting up the fight every time someone wants to buy leads (The good news is that I am not a sales person, so I can get a way with this). I am going to do a favor for those of you who buy leads on the weekend and stop preaching the strategy. Either take them or leave them for someone else to close.

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It was a long night, but I have finally updated back end of LeadCritic.

It took my none technical butt 4 hours and possible questions of not even getting it completed tonight, but it is done. You ask, what is different? Nothing that you can see. Its all on the back end for me and to keep the hackers, that daily attacked LeadCritic with injections of spam, out. At least for another 6 months. lol

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Just wanted to let you all know that LeadCritic may be down for a few hours this evening while I finally make some very needed back end upgrades.

Thanks for your patience!

See you on the other side.

There are a few hot topics in the real estate industry and those are loan modifications and FHA loans. One helps borrowers stay in their current loan situation with a slight modification the other allows people to refinance or purchase into a new, federally back loan.

Both products are being sold by companies that were not already stable with selling A paper products and according to a Business Week article are coming from the sub prime markets with questionable pasts. Many of the same companies that put borrowers in loans that could not afford the payments are now working the system to put questionable borrowers into FHA loans.

The article states a number of examples where corporate executives and owners have been able to restructure their operations to eliminate their shady past, that in some cases included lawsuits, fines, bankruptcies and even jail time, to have the possibility of acquiring an FHA license. In the last year FHA loans have grown from 60,000 in January to 160,000 in September. Today more then 36,000 lenders have FHA licenses, up 56% from the summer of 2007.

You would imagine the Federal Housing Administration would be properly vetting each company that applies for an FHA license, especially since the mortgages are backed by tax payer dollars, but that is simply not the case. The reason for this is that staffing for the FHA as remained level even with the increase demand and publicity. Today, only a call, maybe two take place to evaluate if a company is legitimate. This opens the flood gates for any all companies to risk tax payers dollars and hand out FHA loans. No not all companies specializing in FHA loans are unscrupulous sharks, but it goes without saying that the FHA loan is one of the more flexible loan products available in todays market and couple that with sales and processing skills of ex-subprime sharks, you have a risky mix.

What happens when these loans go bad? Who gets to bail out the borrower again? I can see loan modifications helping borrowers in their need of trouble, however many will still default on their loans. Are we going to see a similar cycle we saw in sub prime and will soon see with Alt A products in the coming years, in the FHA product. Maybe it is simply something we have to live with moving forward.

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