A word of warningRory HackettMortgage leads
Only qualified individuals looking for loans.
Direct and accurate information filled out online.
History of referrals for specific areas.
Supported by large marketing budget.
Nationwide advertising campaign.
Top tier advertising on all major search engines.
Do these sound like just a few of the sales calls you receive?
If you haven't had numerous phone calls, e-mail sales requests or
printed materials trying to get you to purchase Internet-generated
leads, consider yourself lucky. I get them all the time.
I am a mortgage broker, not unlike most of you. I've been in the
mortgage lending industry for 23-plus years, originating, managing
large staffs in big banks and owning my own company as a mortgage
broker for the past 10 years.
We do okay as a small company, with the majority of our business
coming from real estate agent, builder and past customer
relationships. Over the past five years, the number of mortgage
brokers in Utah has exploded, and with the expansion of Internet
lending, our client base is harder to keep and even more difficult
I would like to do more business and keep a more consistent
pipeline, so I showed some interest toward some of the sales calls
I received. We have never purchased a list of names or tied
ourselves to a call center, and we don't intend to. I didn't want
to be the "one out of four" to get the referral and make every loan
a price war. I had some idea of what I wanted. Here is what I
I was contacted by a sales representative from a New York-based
lead generation company. He sold me; he hit all of the important
points, whether true or not. His company provided exclusive leads
by using the ZIP codes of individuals who were looking for a loan
and filled out an application on the Internet. This company was
successful in the east and was now expanding throughout the west.
They were top tier advertising on all major search engines, rolling
out a nationwide advertising campaign and had been receiving a
consistent referral response. The sales representative had a number
of ZIP codes available in Utah that could be purchased on a trial
basis for a 12-week period, but I had to decide quickly, as other
brokers were being contacted. During the next couple of days, he
faxed some reference letters from other lenders and provided the
name of a New York broker for me to contact. The real catch to his
company was that they never sold a ZIP code until it had
consistently produced at least three referrals a month. I looked at
the Web site, and it looked good. Referrals in purchased ZIP codes
went exclusively to the purchasing broker; the referrals from
non-purchased ZIP codes were divided among client brokers in the
state on a rotating basis.
I purchased eight ZIP codes in my market that I am very familiar
with. I paid for the service on my credit card, saw that it was set
up through my e-mail and waited for the referrals to roll in.
According to the information I was told, it should have been about
24 exclusive leads per month.
After four weeks with zero exclusive referrals and multiple
calls to my sales agent, I input a referral on myself that should
have come exclusively to me. I received calls from four other
brokers. The only exclusive lead I received for a mortgage loan was
from a very good friend, but I had requested that he try and find
the site, which he could not. I guided him through the process and
had him fill out the application. I did receive this referral,
which I had considered a test.
During the 12-week period, I received one exclusive referral
(from the friend mentioned above) and five state referrals, none of
which ever returned multiple calls I made to them.
The four brokers who received my exclusive referral, which I
entered into the system, had the same experience. As we have
discussed this general situation, I had them write letters for this
article. The following are a few excerpts:
He gave me a choice of 10 ZIP codes in the Davis and Weber
County areas of Utah that had not been purchased and told me that I
could expect approximately 10 leads per month from each ZIP code
according to their past history. He made lots of claims that I do
not have in writing, but after a few days of calls from him, I
agreed to purchase the rights for seven ZIP codes. Only three leads
actually answered their phones, even though I made numerous
attempts to contact them. Two of those had received numerous calls
and went with better offers. Of the 13 leads, only two were from
the ZIP codes that I purchased. Obviously, I feel that I have been
During a several month span, we only received one
possibility within the ZIP codes that we had purchased. Of the
other eight referrals, we received no real leads out of them.
Several were extremely old—as in, they had already refinanced
their loan. Of those I was able to contact, several said they did
not remember ever looking into any type of a home purchase or
refinance. Needless to say, our experience with them was horrible
and a complete waste of money. Unfortunately, we had also signed up
with one more company that would sell us a certain number of leads.
They were also promised to be accurate, up-to-date leads. Out of
about 50 referrals, we did not get a single loan out of the
A sales representative assured us that we would have
exclusive leads in exclusive ZIP codes. We requested leads from ZIP
codes in only Utah and Wyoming. The leads provided were not
exclusive. Several leads from Utah were actually other brokers who
had also been scammed by this company. We were also receiving leads
for states we aren't licensed in—West Virginia and Montana,
for example. It was obvious that we had paid $2,800 for
I feel like I got scammed. It was a complete waste of money, an
average of $291.67 per referral that went nowhere. This is your
word of warning; use the following list as a guide that might help
1. If you haven't heard of a company and can't find them easily,
your potential clients never will.
2. Don't pay for a long-term contract in full upfront.
3. Get a guarantee of minimum referrals.
4. Have them send you some actual test referrals.
5. Don't be rushed—your business has worked without these
companies in the past, it won't die without them.
6. If there is no way to document their facts, they are probably
7. Review the Web site—if it contains misleading statements,
you become a part of them.
8. You shouldn't send money to people you can't shake hands with
and develop a real working relationship with.
9. Trying to be first is a risk that may prove to be costly.
10. Common sense again—ask yourself, "Are these guarantees
able to be documented facts or just sales jargon?"
Rory Hackett is president of Salt Lake City-based The
Lending Group Inc. He may be contacted at (801) 262-1655 or e-mail