There are many essential metrics that must be considered when a determination is made on how to spend valuable marketing dollars. The acceptable cost per funded loan varies depending on where an individual sits in the organizational chart and how much of a stakeholder one is in the long term growth of the company. Successful lead generation firms are aware of this and for this reason there products are designed to cater to different segments of the mortgage professional population.
A mortgage banker will seek to increase volume and can tolerate slimmer margins immediately sees the benefit of of increase overall lead volume. A cost per funded loan of $400 to $700 per funded loan is acceptable and very profitable, because the bank will draws revenue from the originated loan in more than one way.
There are a number of different ways to market a reverse mortgage. However, they fall into two basic categories: 1.) Waiting for a qualifying senior homeowner to walk through your door with and request the product from you or 2.) Market to the target demographic in a clear and informational manner and let them know the product is available.
Waiting In the Office for Warm Referrals: Lowest Cost Per Funded Loan
The easiest is to rely on warm referrals from past clients. In the reverse mortgage industry this would amount to simply waiting for someone who has previously reverse mortgage there home to go to a friend or family member and to extol the virtues of the FHA HECM or private equity loan that the recently received.
Ideally, they will have excellent comments to share regarding the company that provided the loan as well as the benefits of the loan itself. In this scenario the cost per funded loan is nearly zero and the profit margin associated with the loan is high.The downside to being dependent entirely on warm referrals of this type, particularly for growth oriented firms is easy to see.
First, senior homeowners tend to keep financial matters private and may not discuss financial matters openly. Second, for many seniors, their personal network of trusted people is shrinking as opposed to growing each year. Third reverse mortgages have been available for decades in one form or another and prior to the massive increases in home values associated with the real estate bubble, which substantially reduced the loan-to-value of many properties and increased the available equity, very few loans were done when this was the primary means of communication.
A quick visit to the FHA website or review of the year-by-year statistics reveals this to be undeniable.
Marketing Programs: Growth-Oriented Referrals
Growth oriented firms, particularly those with an exit strategy that includes being bought out by a larger firm or group of investors, will require more than just walk-in to build their businesses. Even large banks and financial institutions market heavily in the communities their agents service.
Anyone familiar with the reverse mortgage industry understands that eventual sale of the business entity or the …