Niche Lead Providers

Lead companies focus on subprime, FHA & reverse prospects
By COCO SALAZAR
4/22/2005

Many originators use mortgage lead companies to find loan prospects. And like many of the loan officers they service, some of these lead providers focus on niche prospects such as customers needing subprime, FHA or reverse programs.

Lender Lead Solutions is focusing on generate leads for reverse mortgage lenders -- including a name change from its former Lender Lead Banc, according to a recent announcement.

The New York-based leads company says it does more than just sell leads to originators. Additional services include training, online marketing and support for lenders.

"With 40,000 calls coming in from seniors and senior advisors all over the US in just six months, we are hearing from lenders that they need us to go beyond the leads," Lender Lead CEO David Peskin said in the announcement. "They need this support to be at their fingertips."

One of its new services is a half-hour sales training program that the executive claims "is making a huge impact on loan conversions."

The popularity of reverse mortgages has surged in recent years due in part to the industry vigorously raising awareness among older homeowners, their boomer children and the professionals on whom they rely for financial advice, according to Financial Freedom, which says it leads the industry's top reverse loan originator. Financial Freedom reported annual reverse loan volume of $1.6 billion, giving it a reported total market share of 55%.

Lender Lead said it is able to link thousands of prospective borrowers to HUD-approved reverse lenders through its Senior Lending program, which reportedly airs celebrity-endorsed TV commercials to educate seniors on reverse loans. Through the program, it is also able to gather daily research on senior lifestyle, attitudes and finances by surveying callers who inquire about the benefits of reverse loans.

"Our proprietary information paints an accurate picture of the life circumstances, challenges, hopes and dreams of today's seniors," Peskin said. "This information is a powerful selling tool for our correspondent lenders."

Meanwhile, GoApply.com targets efforts at gathering prospects for subprime lenders. According to a recent announcement, the California-based leads company is providing an outline of steps consumers can follow to improve their credit score, by advising what they can do to repair their credit and pay down debt to improve their overall financial situation.

"Consumers don't always know where to turn for help, nor do they know there are simple ways to get their credit back in order," said GoApply.com executive Bill Baskin in the prepared statement. "It's important to understand what to do and what not to do, and where to go when your credit report needs cleaning up."

The subprime sector last year was white-hot last year with $608 billion in production jumping a whopping 55% from the prior year, according to subprime company executives at a recent related summit. While it is believed the notable growth may not continue, Doug Duncan, chief economist of the Mortgage Bankers Association, said the subprime market share will stay within the 12% to 15% range.

Rick Madlock, owner of Lenders Direct and a MortgageDaily.com advertiser, said his company targets three niche markets -- subprime, FHA refinance and FHA first-time purchase. It educates prospective borrowers on the homebuying process prior to directing them to the appropriate lenders.

Twenty-five percent of the company's leads come from its niche markets, Madlock added.

Special Programs