The collapse of the mortgage market has rapidly reshaped the face of mortgage lending.
Wiped out are top lenders and notable consumer brands like: American Home Mortgage, Ameriquest, Countrywide, IndyMac, New Century, among 271 other closed-for-business major mortgage lenders.
In a similar trend, even more lenders have closed their doors on major wholesale operations–potentially fulfilling an unpopular, demise of the wholesale broker, prophecy by BlownMortgage.com in late 2007.
Now, the US Government is on a fast track to provide permanent assistance to home owners and buyers through the Housing and Economic Recovery Act of 2008. This will effectively open a full spectrum of mortgage lending, “backed by the full faith and credit of the US Government.”
But, what does this have to do with mortgage lead buying?
This is best started with a quick profile of the typical mortgage lead buyer:
- Member of the 65% of mortgage loan originations attributable to mortgage brokers
- Broadly licensed to originate in 12-30 States
- Majority of originations are subprime and refinance transactions
- Most loans are brokered or briefly “banked” then sold in the secondary market
This lead buyer profile has created a mortgage lead generation market designed around high volume, geographically diverse, and minimalpre-qualifications. Will this change?
Let’s consider the likely new face of mortgage loan originations:
- Consolidation, moving the majority of mortgage loan origination from a top 20 to a top 5
- Shifting significant market share back to Federally Chartered Banks
- Increasing number of full-doc, eligibility/qualification intense Federal loan programs
- More stringent mortgage licensing and regulatory requirements
Here is my theory on the new look of the mortgage lead buyer:
- More concentration–fewer buyers, but larger
- Increased need to source a local lead–bank and retail branches
- Rising demand for purchase leads–again focus on local
- Intense focus on marketing ROI–traditional bank focus on statisitics
- Demand for more pre-qualification–every lead needs a GSE, FHA, or VA home
What are your thoughts? Will all of these market and Federal inputs to the mortgage market change mortgage lead generation?
Photo by: booleansplit
