The trouble with Internet mortgage leads is that people prefer to eat bread not dough. The average Web lead is not cooked properly; it's just a name, not even a lead and certainly not a prospect. Here's what I mean: The average Web lead converts (to funding) at less than 3 percent. This low yield is not compatible with the way most lenders operate. These leads are too cold. A typical inbound call converts at 10 percent to 20 percent for mortgage brokers. If one in 10 offline leads is a winner, why buy Web leads that take 30 calls before closing one deal? In the mid-90s, my company, INPHO, thought we were selling bread, but we were selling warm dough. We faxed and e-mailed leads to top lenders–GMAC, Bank of America, Countrywide and Chase–that resulted in closed loans at a $600 acquisition cost. So far so good. That was about half of their cost. But the conversion rate was just 3 percent. That was not compatible with the infrastructure and expectations of the cons...
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