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They want to buy, not refi

National Mortgage Professional
Mar 24, 2014

They want to buy, not refiLisa KellyMarket segmentation, Target marketing, Refi market

Have you finally squeezed the life out of your borrowers? Have you succumbed to the state of the market these days? It is all about purchases. Of course, it has always been about purchases, you just had a momentary (two-year) lapse in judgment. So, have you stopped waiting for the phone to ring?

It is a tough realization: The market has changed, and you didn't. But you weren't alone. There were many holdouts to the purchase market. You will even find that some mortgage brokers and loan officers are not in the business anymore. If you want to get your head above water and stay that way, diversify and get back to the basics.

Begin with marketing 101. Divide your market into targeted segments and then position your product.

*Market Segmentation: Identify the borrowers and separate them into groups. Segments could include first-time homebuyers, credit-challenged borrowers, self-employed, second-home purchasers or persons relocating to your community. Make a list of as many viable groups as you can imagine. Then reduce the list to three or four groups that you will target. If you attempt to go after every group, you may find your efforts diluted and then you might as well be back in today's refi market. You cannot be all things to all people. Reducing your list to a manageable few groups is critical. Always include your group of previous borrowers. They are perfect prospects as well as a source of referrals.
*Target: After separating borrowers into groups, pursue them with all of your resources and efforts. Each group requires different target marketing. After all, you wouldn't go after the investment market in the same way you would first-time homebuyers.

First, decide where to find each group. Certain groups will overlap some of the time. For example, some first-time homebuyers may also be credit challenged. Will you be marketing to the general public to find the group? Or will you market to real estate agents, large employers or relocation companies? Be creative and take chances in finding your target borrowers.

Second, develop the message you want to deliver. Your message reflects the core of your position in the market. Be consistent as well as persistent. Your position in the marketplace is gauged by the borrower and how they see you in relation to competitors. Why would the borrower call you instead of a competitor? What products do you offer? Do you present yourself as an expert in the mortgage industry? Are you conveying integrity in your message? Do you provide the borrower with information, or are you all fluff? Furthermore, the message you deliver to first-time homebuyers is not the same message you deliver to borrowers purchasing investment property. Don't mix your messages. You may end up with four or five different messages.

Third, deliver the message to your groups. There is as much diversity in delivering the message as there are borrowers. With direct mail, you could target residents of high-end apartment complexes for your first-time homebuyers, or you could target real estate agents borrowers moving up. With advertising, you could advertise one message in free weekly newspapers and a second message for investment purchasers in a business publication. Find delivery methods that work for you and that you can afford over time. Persistence is vital to your success. Don't expect to deliver the message once.

This is a long-term process, but one that will pay off for many years. If you take a strategic approach to your marketing, you'll be ready the next time the refi market comes ... and goes.

Lisa Kelly is senior vice president of Upland Mortgage, a national wholesale lender specializing in sub-prime and alt-A business. She may be reached at (512) 542-9800 or e-mail [email protected].

Mar 24, 2014