A group of marketing professionals has formed a company they say is making it easier for mortgage brokers to buy leads from trusted sources.

While other companies help connect lead buyers with leads, they typically charge lead sellers to advertise on their sites or take a cut of their profits.

A group of marketing professionals has formed a company they say is making it easier for mortgage brokers to buy leads from trusted sources.

While other companies help connect lead buyers with leads, they typically charge lead sellers to advertise on their sites or take a cut of their profits. LeadPolice.com turns that business model on its head, letting sellers who meet the company’s standards market themselves on the site for free, while charging buyers to use the service.

Because LeadPolice doesn’t depend on sellers for revenue, buyers can be assured the company has their best interests in mind, said LeadPolice.com Vice President Melissa Rosno. LeadPolice.com owes its allegiance to buyers, who share information about the quality of leads they obtain from approved sellers. Companies that fail to deliver are barred from the site.

“A lot of Web sites out there have information on lead-generation companies, but for the most part they are charging money on advertising,” Rosno said. Because ending a relationship with a seller can hurt those companies’ bottom lines, she said, “It’s hard for them to remain unbiased.”

“To remain a truly unbiased third party, we don’t think there can be a revenue exchange between the lead sellers and the intermediary,” Rosno said. “We can honestly say that, unlike other companies that take a percentage of revenue, we have no motive to keep (sellers of bad leads) in our database.”

Lead buyers pay $30 a month or $300 per year for membership, a cost they can easily recoup through discounts sellers offer to members and higher-quality leads, Rosno said. Because sellers are getting free advertising on the site, LeadPolice.com encourages them to offer discounts to its members.

With mortgage leads often selling for $50 or more these days, if sellers offer a 10 percent discount to LeadPolice members, that “adds up pretty quickly,” Rosno said. “The savings can pay for membership.”

The site also offers dispute resolution, and aims to be an educational forum where buyers research authorized lead sellers and learn from industry experts.

LeadPolice provides information on companies such as how many years they have been in business, the average rate of return on their leads, and the number of leads they generate — 25 “data points” in all, Rosno said.

“I’m very excited about the ability to compare companies side by side,” Rosno said. “Obviously the more informed you are the better decision you can make. Never before has this information been put together in one place.”

LeadPolice.com launched this summer with mortgage lead originators, and plans to offer real estate leads by the end of the year, Rosno said.

“We chose to launch with mortgage because there are more mortgage lead-generation companies than any other category,” Rosno said. “Mortgage brokers, especially smaller ones, are more likely to rely on purchased leads than real estate agents.”

While real estate agents are likely to specialize in a local territory, mortgage brokers can lend statewide or even nationwide.

LeadPolice has signed up “a lot of the big players” in the mortgage lead-generation business, including Prospect Zone and LoanWeb, and now has about 40 authorized lead sellers, Rosno said.

Some other Web sites that offer to match buyers of mortgage leads with multiple sellers include ROOT Exchange and LeadPoint.

ROOT Exchange and LeadPoint are modeled after commodities exchanges, with sellers competing for buyers who bid for leads at auction. 

Both companies say they screen sellers and monitor the quality of the leads sold on their sites, and will bar companies that aren’t providing good ones.

“One hundred percent of the leads coming through our system are getting feedback,” said LeadPoint chief marketing officer Michael Rosenberg. “It’s not just a subjective, or anecdotal rating” of a company, but customer evaluations of the quality of each bundle of leads sold on the site, he said. 

“When we find out a seller is providing poor-quality leads, we kick (them) out of the marketplace without the buyers even finding out,” Rosenberg said. “We’re doing all the work for them.”

Although LeadPoint is an exchange for many types of leads — nearly 1 million have been bought and sold on the site this year alone — mortgage leads helped the company set a single-day record of 25,000 trades on Oct. 16.

More than 350 lenders purchased leads generated by a LeadPoint seller that placed an ad on the MSN homepage offering home equity and refinance loans. LeadPoint estimates the leads will generate over $100 million in loan originations.

LeadPoint vice president of operations Donny Hall said a potential shortcoming of LeadPolice is that it only helps buyers find a lead seller — it doesn’t help facilitate the sale of the leads.

“If you’re a buyer going into the LeadPolice directory, to benefit from dealing with five sellers or 100 sellers, you have to develop relationships with each one, and manage them using your own methodology,” Hall said. “That’s cumbersome.”

LeadPolice’s Rosno said there are many software applications that help lead buyers manage purchases from multiple sellers.

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