Saturday, February 27th, 2010 at
12:26 am
By Doug Huggins
I have received several e-mails recently stating that they had tried direct response mail and it had failed miserably. Most of us who teach marketing methods hear that same complaint. I would suggest that there are two probable reasons so many people are disappointed with their direct mail:
One – The Message – The message delivered by most mortgage and real estate companies couldn’t sell free water to an American GI in southern Iraq. The marketing pieces I see are poorly designed, with absolutely no thought given to communicating to the needs and wants of the receiver.
In my manual, “Why Most Mortgage Marketing Fails and What to do About Yours”, I discuss in detail the top 10 reasons most mortgage company’s and originator’s marketing efforts fail to work. We show many actual examples of marketing pieces and literally “rip them to shreds” to show you how to better view what you are currently doing and how to make simple, no cost changes to dramatically increase the response to your current marketing.
Two — The second major reason many direct mail campaigns fails is the mistaken idea that One Mailing a Campaign Makes.
How often when you are sitting at home watching your favorite TV show do you see the exact same commercial over and over and over again?
Sometimes it becomes really, really irritating, doesn’t it?
So why do advertisers spend the millions of dollars to deliver the same exact message over and over to the same audience?
Because, for better or worst, frequency is a MAJOR factor in getting your marketing message across and acted upon.
A single exposure equals minimal impact but repeated exposures will have a positive impact, disproportionate to the number of exposures.
Here’s one example – say you’re doing an apartment mailing for First Time Home Buyers to the occupants of 5,000 apartment units. From one type mailing you might pull anywhere from as low as one quarter of 1% to 1% response. Maybe 12 to 60 responses. The variants between the 12 and the 60 may depend on the effectiveness of the offer.
But if you mail to those same 5,000 prospects six times over a three-month period your overall response might be 3% to as high as 20%, 150 to 1,000 people. That’s about 12 times the response from the single mailing not just six times.
See the multiple context doesn’t just increase response proportionately they increase it disproportionately. Is this always true? No. Sometimes there’s something else wrong, such as the list selection, the offer, the company’s credibility, whatever and no amount of mailing will overcome it but presuming the list has been chosen with reasonable care and intelligence, the offer is good, the mail piece is good then this kind of effect should be achieved.
If you have been disappointed with the response you have received to your direct mail pieces – do NOT assume that it is because direct mail doesn’t work for mortgage marketing – it does. Direct mail was a vitally important part of the overall marketing system that allowed me to generate over 280 inbound – purchase money – lead calls each and every week for 107 consecutive weeks! It works! Maybe you need to discover why yours doesn’t.
Now, I’m not suggesting that you just go out and blindly start doing direct mail marketing. That is another reason so many would-be mortgage marketers fail – they do not have an overall plan to succeed. Marketing should be a planned event – specifically planned to target a precise market segment to get specific results. Plus, the marketing plan should be just one part of an overall success plan for your business and your life.
Your business may not be your life; and success in business doesn’t guarantee success in life. But, the more money you have the more option you have. I’d rather be miserable and rich than miserable and broke!
By: doug huggins
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Monday, November 16th, 2009 at
1:11 pm
Fannie Mae will soon be implementing new mortgage guidelines that will affect an enormous amount of home owners, investors, and soon to be home buyers. These major changes have to do with allowable loan to values on a number of different mortgage types. For those of you who do not know what loan to value (LTV) is, it is the the ratio of the mortgage balance over the home’s value. For example, if you take out an $80,000 mortgage on a $100,000 home, the LTV = 80%
See the pending changes below:
Primary Residence Cash out Refinance
1-2 Units 90%/90% (CURRENT)
85%/85% (NEW CHANGE)
660 score required if LTV >75%
Second Home Cash-out
Refinance
1 Unit 85%/85% (Current)
75%/75%(NEW CHANGE)
Non-owner Purchase 1-2 units
90%/90% (CURRENT)
85%/85% (NEW CHANGE)
Non-owner Rate/term Refinance
1-2 Units 90%/90%(CURRENT)
75%/75% (NEW CHANGE)
Non-owner cash-out Refinance
1-2 Units 85%/85% (CURRENT)
75%/75%(NEW CHANGE)
As you can see, these new changes will greatly affect the allowable loan to values on several different types of mortgage transactions. This can be seen as a positive thing as Fannie Mae and Freddie Mac are in desperate need of stronger investments. Gone are the days of 100% Loan to Value home for Investors and even first time home buyers. 100% Rural programs and VA still have 100% for those that qualify.
Another important note for loan officers:
Fannie Mae’s DU system will no longer be allowing income waivers. This should be implemented sometime in the beginning of November. This is just another change that we all hope will help the mortgage and credit markets get back on their feet.
By: Matt Madlang
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Saturday, November 14th, 2009 at
3:24 pm
Do you see the dust blowing through the deserted town called Sub-prime mortgageville? If you did not already notice this tibdit of information that I will be giving you then you are in for a surprise. Over the next several months a stated income or no-documentation connecticut home loan will have more hoops to jump through to qualify. The industry as already changed so many of the guidelines regarding these loans that your head could burst trying to keep up with the new guidelines. The new changes even impacted the connecticut home equity loan rates as well. Some of the examples of the changes include; eliminating stated or no doc programs for first time home buyers and requiring substantially higher credit scores for borrowers.
As recently as last year in 2006 connecticut homeowners or potential home owners could qualify for a Connecticut home loan for up to four or five hundred thousand dollars from mortgage banks without verifying their income and with a credit score below 600. From our perspective it appeared that qualifying for a connecticut home mortgage required a pulse and the ability to sign your name. I can never understand how someone who cannot prove their income could qualify for connecticut home mortgage with no money down through 100% financing for their first home purchase with lackluster credit scores in the five hundred range. No one had to tell me that it sounded like a bad idea.
From where I sit it seemed like the mortgage industry as a whole was setting the connecticut homeowners up to lose their homes and continue the poor spending habits that most times contribute to the low credit scores in the first place.
Now in fairness to the mortgage industry, stated income loans have been around for over twenty years and were initially created to provide an option for self-employed individuals who often have challenges gathering income information from several different sources. However, even in the good old days the borrower had to have great credit scores as well as put down a minimum of twenty percent to qualify for a connecticut home mortgage loan using this program. The historical data shows that these programs had a high success rate and minimal defaults on the mortgage payments.
Well, let’s fast forward to 2007 and you can see a very different story. We have record foreclosures in connecticut and many lenders that served a vital role in employment for many areas are now shuttered and boarded up. If you want to hear my earth-shattering advice then here it is: buy a home you can afford with your current income. If proving your income is a challenge for any number of valid reasons then you must have excellent credit and be able to verify your income and then you are the ideal candidate for the stated or no doc program. On the other hand, if you plan to get a stated income or no doc loan because your income is not enough to qualify for the program, then you are driving straight towards the dead end sign that leads to financial demise. You must live a life that is balanced between achieving the American dream as well as preparing for your future.
By: Christoper Rivers
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