Lenders, brokers get creative in slowing mortgage market

Part 1: Understanding lead generation

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(This is Part 1 of a three-part series. See Part 2 and Part 3.) Because the mortgage market has slowed in recent months, loan providers (lenders and mortgage brokers) find themselves with excess capacity. Rather than go out of business or fire loan officers, many have taken to purchasing mortgage leads. Mortgage leads are packets of information about consumers who loan providers can hopefully convert into borrowers. Leads have value based on the likelihood of their becoming closed loans. If you were attracted by an ad such as "mortgage rates as low as 1 percent," and filled out a questionnaire about yourself in response, you are a lead. The questionnaires ask about the things that matter to a lender in assessing a loan, including income, employment, credit, house price, and loan amount. They also ask for identifying information including telephone numbers and e-mail addresses. The more information given, the more valuable the lead, but lead generators are fearful of asking for so...