It’s a good bet that a person with a perfect credit score and a seven-figure income isn’t much of a credit risk. It’s also a good bet that homeowners who have built up a large amount of equity and have a high income and a high net worth are looking for a place to invest their wealth.
After several years of declining home equity across the country, home values are again starting to rise and many homeowners are looking at real estate as a smart investment choice. The different types of real estate investors can be divided into several categories including: commercial and residential buyers and prospects; vacation and second home buyers and inquirers; collateralized mortgage obligation holders/inquirers and prospects; and homeowners with high incomes, net worth and equity.
Marketers looking for qualified leads on the last category, homeowners with high incomes, net worth and equity, can easily obtain lists of such prospects. This group of prospects is particularly likely to invest because their equity is available now for second homes, vacation homes and other types of real estate.
The equity can be taken out using one of two different borrowing options; the home equity loan and the home equity line of credit. Mortgage experts advise that the best and most common line for people who need the money all at once is the home equity loan, while borrowers who would like to pay in installments generally choose the home equity line of credit. In either case, funds are available for large purchases, including real estate down payments and mortgage payments.
The average age of homeowners with high amounts of equity and incomes who are looking to invest in real estate is 58 with an average income of $125,000 and a net worth of $780,000. There are approximately 8.4 million homeowners who fall into this category. Lists of such prospects are compiled using information from investments they’ve already made, questionnaires, telemarketing, government records, direct mail inquiries, real estate transactions, seminars they’ve attended and other proprietary sources.
These types of investors could also be interested in using their equity for other high-end expenses, including home improvements, vacations, college tuition and more. Marketers with offers for real estate investors can use prospect lists for both direct mail and telemarketing campaigns. This method is successful because it uses specific criteria (age, previous investments, income and others) to cull only prospects who already have the qualifications for and interest in a particular home equity product.
Endless Resources can provide lists for these investors that turn prospects into clients, providing a high return on investment. Prospect lists are a great bet, and a good place to start for your marketing campaign aimed at homeowners with high equity, income and net worth.
Marketing to Homeowners with High Income and Equity in Their Homes
Real Estate Investors Coming Back to the Market
Historically low mortgage interest rates and stabilizing home prices are luring many would-be investors into the residential real estate market. Additionally, job growth, the greatest factor in the demand for office space, and a major component of fueling demand for other commercial properties, resumed in January after several years of stagnation, and leasing activity is up in most states, according to the National Real Estate Investment Association.
Another factor that had slowed investing was a crunch in the credit market. Companies and individuals had a much more difficult time obtaining financing for their investments when banks curtailed the amount of credit they were willing to lend. However, the crunch is easing. The Mortgage Bankers Association reports that commercial and multifamily mortgage origination volume in the first quarter of 2010 was 12 percent higher than the same period a year ago and 26 percent higher than the fourth quarter of 2009.
Residential mortgage bonds, once considered some of the safest investments and which were hit hard in the recent financial downturn, are once again booming. Real estate investors are again seeking out mortgage bonds backed by the U.S. government, which has helped drive mortgage rates for consumers to record lows, according to the Wall Street Journal.
This news, combined with the uptick in commercial investment, means real estate is once again being seen by many as a good place to invest money. Banks are also starting to hire back mortgage lenders, a sign that they’re optimistic that they’ll need those lenders to process requests for housing loans, according to Realty Times.
Real estate investors, including residential or commercial inquirers and prospects, have a lot of supply to choose from in this market. Marketers who are looking to target these investors also have a lot of options—they can find people who have already invested in real estate or who are actively looking for an investment by obtaining a real estate investor prospect list that is specifically designed to target who they’re trying to reach—people seeking residential or commercial properties.
These people have already invested in or are looking for an investment for a minimum of $10,000. This type of investor is not affiliated with a group and likes the historical stability and yield of real estate properties. The investments can include: residential or commercial buildings, land, apartments, single family homes, office complexes or other property investment opportunities.
The prospect list can be tailored for either a direct mail or telemarketing campaign and can be further tailored by selecting specific criteria relevant to a marketer’s goals and needs. The list is created using information obtained from investment questionnaires, direct mail pieces, subscriptions, seminars they’ve attended on real estate transactions, public records, telemarketing and proprietary sources.
The selections include:
- Net worth
- Gender
- Age
- Phone number
- Zip code/county/state
Whether a marketer is seeking prospects looking for homes, apartment buildings, commercial land or buildings, Endless Resources can provide them with a targeted list of consumers ready to take the plunge into the real estate market.
Find the Right Real Estate Investor Leads with Property Investor Lists
Many people choose to invest their money instead of letting it sit collecting miniscule amounts of interest in a bank savings account. Investing in real estate is a common way of ensuring that your money is working for you, instead of the other way around. There are as many types of potential investors as there are investments, but investors all have one thing in common—they’re looking for the right project for their particular budget and goals.
Real Estate Marketers who are trying to target these people need to know that their messages are reaching the right audience. One way to ensure that telemarketing and direct mail campaigns are connecting with in-market decision-makers is to use Real Estate Investor lists. These lists can be tailored to reach the specific type of investors who Real Estate Investment Seekers are trying to reach. The following are just a few of the investor types that real estate investor leads can target:
- Real estate investors — these are individual investors who already have invested in real estate or requested information regarding an investment for a minimum of $10,000. These investors are particularly interested in the relative security of real estate and the potential yield. The offers are for residential or commercial buildings, land, apartments, single family homes, office complexes and other property. These individuals are an average age of 54 and have an average net wealth of $280,000.
- Homeowners — these are high income and high net worth individuals who have a high percentage of equity in their home. They are looking to invest their income in many different options, including vacations, home improvements and luxury purchases. These individuals are an average age of 58 and have an average net worth of $780,000.
- Vacation home and second home buyers and prospects — these affluent investors already have a second vacation home or have expressed interest in buying one. They are frequent travelers and have decided that a second vacation home would be a cost effective investment or are interested in a second vacation home for their personal use. These individuals are an average age of 58 and have an average net worth of $850,000.
- Collateralized mortgage obligation (CMO) holders, inquirers and prospects — CMO’s are a set of mortgages, called a pool. Investors in a CMO buy bonds issued by the CMO and they receive payments according to a set of rules. These leads refer to people who already have a CMO or have inquired about getting one or would be likely to be interested in a CMO. The CMO’s are offered through a financial planning institution and are secured by real estate. These individuals are an average age of 58 and have an average net worth of $780,000.
The lists are compiled using a variety of sources, including subscriptions, investment questionnaires, information from seminars that prospects have attended, previous real estate transactions, government records, telemarketing and direct mail pieces. Endless Resources can provide marketers with tailored prospect lists that will reach whatever kind of real estate investors they’re trying to reach, whether it’s a homeowner looking for that great vacation spot or a businessperson looking to put her money to work.
Reverse Mortgage List Marketing
Sometimes paying for retirement requires taking out a loan. With more than 35 million people over the age of 65 in the U.S., the potential market for products that help seniors looking to pad their incomes is huge. More seniors are turning to one product in particular, the reverse mortgage, to help pay for medical bills, retire other debt or just provide greater financial security.
Reverse mortgages allow people 62 years and older who own their home outright or have a low mortgage balance to pull equity out of their homes without making payments. With several lenders recently cutting the price of reverse mortgages, seniors who may not have previously considered this product are taking another look.
The mortgage lenders have waived their origination fees and other charges on certain reverse mortgages they sell as part of the Federal Housing Administration’s Home Equity Conversion program, according to the New York Times. Brokers and lenders looking to market to those eligible for, and interested in reverse mortgages have a large audience.
More than seven million people over the age of 65 with annual incomes below $30,000 own their homes outright, according to the Census Bureau’s American Housing Survey conducted in 2007, the most recent data available, as reported by the New York Times.
How to Market to Reverse Mortgage Prospects
Depending on their product or service, mortgage marketers may be targeting seniors who are most in need of financial security, those who aren’t looking to pull out that much equity from their homes or those seniors who have a significant amount of equity built up over decades of living in a home. The most successful direct mail and telemarketing campaigns use precise data to target a particular audience—consumers who actually need and want the products lenders and brokers are selling.
This kind of information is easy to obtain from Endless Resources, a company that specializes in providing mailing and telemarketing lists using certain selection criteria from the three major credit bureaus. When you order a reverse mortgage list from Endless Resources, you will receive information that has been proven to result in greater sales. Individual results will vary based on overall goals, target population and market area, among other factors.
Here are some selection criteria from the credit bureaus that mortgage marketers can choose depending on their campaign and product:
- > Age 62-92
- > 1 to 50 percent loan-to-value-ratio
- > Currently 30 to 120 days late on paying mortgage
*Numbers of those who currently fit into this category are limited
Another example of selection criteria that could yield seniors who likely need additional income includes:
- > Age 62 to 92
- > 1 to 50 percent loan-to-value-ratio
- > 60 percent debt to available credit ratio
Some Basics on Reverse Mortgages
- > The majority of reverse mortgages are made through the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage program, or HECM. To qualify, consumers must be 62, own their home outright or have a very low mortgage balance and live in the home.
- > The reverse mortgage is normally repaid, with interest, from proceeds when the homeowner or his or her heirs sell the house.
- > For FHA loans, the amount that homeowners can borrow depends on their age, the current interest rate, the appraised value of the home or FHA’s mortgage limits for the homeowner’s area, whichever is less, according to HUD.
- > Generally, the older the homeowner and the greater the value of the home, the more the homeowner can borrow.
Making the Most of Your Leads With Prescreened Credit Data
Finding interested, qualified customers for your mortgage products can be like trying to piece together a document that’s just gone through the shredder. Some customers may be interested, but lack the financial qualifications you desire or may be late on payments to other creditors, making them unappealing targets. Others may be qualified, but not in the market for a mortgage product or service. So how do mortgage marketers piece together a list of potential customer leads that will get them the results they seek without making them sift through piles of dead ends?
One solution is to use prescreened credit data, which allows companies to compile lists of prospects that fit all of their most important requirements. Using this data is kind of like employing a dating service to find your next partner. You weed out the married folks, those too young or too old, and those without jobs.
Prescreened data for mortgage marketing/lead generation purposes can be obtained from the three major credit bureaus, Experian, Equifax and TransUnion and is used by mortgage lenders and brokers to generate leads via direct mail, email and telemarketing campaigns, though the direct mail and telemarketing methods are most common.
Benefits
Prescreened data includes personal and financial information. According to the Mortgage Bankers Association, (MBA), prescreened offers of credit include important advantages for both consumers and businesses, marrying potential customers who would be more likely and able to buy mortgage marketers’ products with the companies offering services.
Consumers receive offers that are also more likely to contain lower rates and payments than they would otherwise be able to obtain and such data allows lenders to tailor their offerings of mortgage products for which the consumer is likely to qualify, according to the MBA. Credit bureau information can increase the yield of positive responses from a solicitation. Prescreened data allows marketers to make informed decisions on how to tailor their campaigns or even whether to conduct the campaign at a certain time.
Mortgage marketers can identify prospects that meet their specific financial requirements with popular selection criteria like:
- an actual credit score (FICO/Beacon)
- aggregate revolving account balances
- loan-to-value ratios (LTV)
- derogatory payment information like 30-, 60- or 90-day late mortgage or retail account payment information
- estimated home values
If a company is offering a mortgage loan with a prime rate, for example, it would want to seek out customers with high credit scores and more assets, however, if the company is offering a product for customers who have a difficult time obtaining traditional loans, it would use a different set of credit data for a subprime credit offer.
Some Considerations
Businesses that use this data must have a reason that complies with rules set out in the Fair Credit Reporting Act (FCRA) and make a firm offer of credit in order to use the prescreened data. A firm offer of credit is a guarantee that the company will offer consumers the loan or offer as long they meet certain criteria—based on the information in the credit report—that was used to make the offer.
Endless Resources is a preferred service bureau that is partnered with a nationally licensed lender in order to give those who would ultimately use the data, including marketing companies, mortgage brokers and lenders, the permissible reason they need in order to access and use the information.
Consumers have a right to opt out of receiving prescreened offers of credit or insurance, and all solicitations, whether via direct mail, email or telemarketing, must make this clear, according to The Fair and Accurate Credit Transactions Act, (FACTA). The offers have to describe the opt-out notice using a certain type size, prominently display the opt-out notice and disclose certain other requirements.
The full rule can be found here: http://www.ftc.gov/os/2005/01/050124factafrn.pdf
Along with the opt-out notice, marketers are required to supply the following:
- Direct mail and email offers must display terms and conditions of a firm offer of credit (as approved or to be approved by the lender.)
- Telemarketers must provide a subscription account number to the DNC, in case a customer asks to be placed on the Do Not Call Registry, (DNC). Telemarketing scripts must also describe the terms and conditions of a firm offer of credit.
For an example of an offer of credit that complies with the law, go to http://www.ftc.gov/os/2005/01/050124factafrn.pdf and scroll to the end for model notices.
FHA Streamline Refinance Mortgages Growing Trend in Market
The recent real estate crash has resulted in many changes to the market, including producing scores of consumers looking to refinance mortgages that they can no longer afford. Many of these consumers would previously have turned to the sub-prime mortgage market or to other products to obtain refinances, but now that the sub-prime market has all but disappeared, these consumers are ready to seek out other options.
One of those options is an FHA Streamline Refinance, and brokers and lenders who offer this service can easily connect with potential prospects by obtaining a targeted list of consumers who are more likely to be in the market for a refinance.
Borrowers with loans insured by the Federal Housing Administration (FHA) have the option to “streamline” their mortgages, which results in lower monthly principal and interest payments. With fewer options in the market, more and more borrowers with FHA insured loans are looking for brokers and lenders who offer Streamline Refinances.
Crafting the Right Campaign for Your Business
Mortgage marketers can craft a campaign to target these borrowers using criteria for a prospect list including: those with FHA mortgages, credit scores of 640 or higher and no late mortgage payments, including other popular options.
Results will vary depending on the type of marketing campaign created, the desired goals and market area, along with other variables. Endless Resources specializes in providing lead generation-based lists for marketing campaigns including direct mail, email and telemarketing, and can deliver a targeted list using criteria that would be most helpful in a lender or brokers’ specific campaign.
Mortgage marketers can also use other popular criteria when building a list of potential prospects, including:
- 13 to 48 month seasoning
- 150,000+ balances
- No late payments in the last 12 months
- Room for equity
FHA Streamlines Rise in Popularity
FHA has been offering streamline refinances since the early 1980s. By the 1990s, FHA had about 15 percent of the home purchase market. But as other markets gained in popularity, the administration lost business to brokers and lenders who marketed more aggressively, and by 2006, FHA’s share of the market had declined to less than 4 percent, according to mtgprofessor.com, a site run by Jack Guttenberg, professor emeritus at the Wharton School of the University of Pennsylvania.
With the financial crisis, FHA loan limits were raised and its market share of new purchases was back to 15 percent and its refinances were also much higher, according to the site.
Streamline refinances are often simpler and easier to obtain than an original FHA insured mortgage and lenders have to deal with fewer documentation and underwriting requirements, according to the Department of Housing and Urban Development (HUD).
Who is Eligible for FHA Streamlines?
The basic requirements of obtaining an FHA Streamline according to HUD are:
- The mortgage to be refinanced must already be FHA insured
- The mortgage should be current and not delinquent
- The refinance must result in the borrower having lower monthly principal and interest payments
- No cash may be taken out on mortgages refinanced using the streamline refinance process
Phone Append Service
Phone append services are a great way to increase the success of your sales team connecting to more prospects and customers. Endless Resources provides a telephone appending service for both consumer lists and business lists, so you and your team can quickly find the phone numbers of your customers and prospects. By using the names and postal addresses of your customers and prospects, we can put together a telemarketing list with accurate and current data so you will always reach your contacts when you call them.
When you request phone appending services, it is important to know you are working with a trusted source that ranks their input and output data for quality and accuracy using a robust data validation process. You may need consumer phone leads to sell mortgage refinancing or new auto loans to customers already in your database. Or you may need business phone leads so you can directly reach the right decision maker. Either way, this information can enhance your response rates and make for an effective telemarketing campaign – but only if the phone appends are current and accurate.
Endless Resources offers these types of telemarketing lists with a superior match rate and complies with do-not-call regulations. Expand your direct sales and marketing opportunities by appending the most current available phone numbers to your customer and prospect database, which may consist of completely outsourced list for use in a telemarketing program. Endless Resources also offers a demographic append service that appends information such as age, income, ethnicity, presence of children and other statistics that will enhance your target marketing program.
Most important regardless of whom you choose to append phone numbers to your list; the level of accuracy of the service will make or break your telemarketing efforts. Thanks to our advanced matching software, phone preference suppression files and universal databases that contain the most current phone numbers available we have consistently helped our customers reach their target prospects and customers at their correct phone numbers.
New to the Automotive Industry “Auto Prescreen”
Auto prescreen is a revolutionary new web service powered by Experian and backed by Western Sierra Acceptance that gives auto dealerships access to a nearly instantaneous method to “pre-screen a customer by credit score range. Imagine if you could simply enter a prospects name and address, and within seconds know what credit score range they fall in without the need for a social security number or a completed credit application. This is in full compliance with the FCRA and powered by Experian. The results are backed with a firm offer of credit based on tier results.
The entire solution is web-based so there is no software or equipment to buy, just your internet connection. Once the automotive dealer is licensed with auto prescreen, they log into the secure website. The authorized individuals enters in the prospect’s name and address, within second you will know what credit score range applies to the prospect. Once you have seen the results page you are taken to a firm offer page indicating the tier level of the consumer.
Frequently asked questions
• How do the tiers work? Each Result that matches will show what “tier” a customer is in based on their credit score range. There are 10 tiers and each tier covers a 50 point range
• How does the firm offer part with Western Sierra Acceptance work? WSAC is a national automotive finance company. When your customer results are shown, the next page after that will be the firm offer from WSAC and the terms of that offer. The initial firm offer is based off the “pre-screen” results only and additional customer information will be needed for a formal loan decision.
• How can I legally get a credit score without a credit application? Prescreening is permissible under the FCRA with the requirement of a “firm offer of credit”. Western Sierra Acceptance Corp., a licensed consumer finance company, has built a tool with their underwriting guidelines which provides the “firm offer of credit”.
• What is the firm offer of credit and why do we need to make sure the customer gets it? The FCRA permits this type of pre-screened offers, but mandates that the consumer get a copy of the terms and conditions that were used to conduct the pre-screen. Those terms and conditions are what covers the firm offer of credit requirement. It is still only a pre-qualification or pre-selection and not a guarantee of credit.
• Will we get results back on everyone we put into the system? No. Because the “opt-out program” there will be a small percentage of people who the system will not return a result on. It is a very small percentage of the total population and is only those folks who have actually registered in the federal opt-out program for pre-screened offers.
• How do you get started? Please call 866-741-3148 a service representative from Endless Resources Inc will be standing by to assist you with the start up process. Or feel free to email us at info@endlessresources.com or simply visit our web site at http://www.endlessresources.com
