Maximizing Profit in a Bull Market Using Trigger Data Lists

Mortgage marketers use recent trigger data lists to target potential candidates

When the Federal Housing Administration (FHA) lowered the Upfront Mortgage Insurance Premium to rock-bottom levels in June, the decision was extremely beneficial for the mortgage industry. HUD’s ruling uncovered a large, lucrative block of potential clients around the nation. Almost immediately, a deluge of solicitations swamped borrowers who, after being stuck in high interest rate loans for years, were now easily able to refinance.


Naturally, the Direct Marketing industry has benefited from this activity. Direct mail companies everywhere are reporting large boons in business. In fact, business has been so good that some mortgage clients actually reduced the number of direct mail advertisements they usually send due to high response rates. A recent modest drop of 10,000 pieces for a client produced in just two days 198 unique calls. They needed a week just to catch up. Business is definitely good, but just as there is a need to maximize leads when the market is down, profit maximization when the market is up is just as important. There is still money being left on the table.


In the past few months, the push by mortgage shops to market to FHA homeowners with seasoned loans prior to May 31, 2009 has been so intense that the marketplace has become oversaturated. Lending firms are advertising atop one another, sending mail pieces, directing calls, and emailing all of the same borrowers. While the influx of qualified borrowers still leaves plenty of room for mortgage shops to capitalize, the FHA’s decision seems to have dictated an over-emphasis on those specific homeowners. Even as HUD’s ruling went public I could sense what would be discussed in boardrooms across America “We’ve got to get those seasoned loans prior to May 31st, 2009! They’re itching to get out of those high-interest loans!” The thing is, they’re right. It’s an easy pitch and there’s real value for the consumer. But it’s important not to get distracted by what looks like a sure thing. If it’s a sure thing for you, everyone else thinks it’s a sure thing too, and all the mortgage firms end up going after the same clients. What many mortgage shops are failing to notice is that a large portion of the market is being ignored.


Mortgages in the 20- to 38-month seasoning window are excellent options for refinancing, namely loans from March of 2009 to November of 2010. Interest rates for these types of loans are still very low 2.5% for an ARM, 3.5% for a FIXED. Their original rate during the time of seasoning was in the 5.25%+ range. The net tangible benefit of refinancing to the consumer is viable, and the savings on the rate alone makes it worthwhile. So, even though borrowers in the older seasoning window are refinancing in droves, younger loans also offer a huge upside. The best part of going after those potential clients is that not many mortgage shops are choosing to target them right now; the competition is minimal. Targeting both these mortgage brackets in conjunction is a surefire way to boost your firm’s bottom line.


Another change occurring in the industry as a direct result of FHA’s ruling is an increase in the use of “trigger leads.” Trigger data is generated when a potential borrower, re-fi, or purchaser has their credit pulled. With the excess of advertisements swirling around, there is a surplus of homeowners checking their credit. Mortgage marketers use recent trigger data lists to target potential candidates. These data lists are extremely time sensitive since the candidate is actively seeking a loan, and has already visited a mortgage broker and pulled a credit inquiry.


Therein lies the difficulty in using trigger leads. It places lending firms in direct competition. For the direct mail to be effective it must be attractive, personalized, and arrive before the consumer signs with another mortgage firm. While this may seem like too many variables for it to be an effective method of advertising, when trigger data is used correctly it is one of the most effective leads to use. The reason these leads are so useful is because you’re dealing with borrowers that have already shown a real interest in refinancing. The desire to move forward is there. With so many interested homeowners getting their credit pulled due to FHA’s new expanded guidelines, trigger inquiries have swelled.


With the increase of mortgage activity in recent months, the connection between the mortgage shop and the marketing company is changing. It is imperative that the marketing team the mortgage shop hires is able to guide the advertising campaign from concept to conception. The use of trigger data is accelerating this process. That means design, printing, and mailing need to be completed in-house, not sub-contracted to other agencies. With the competition as tough as it is now, there isn’t room for missteps from an advertising agency.


Business is up. Homeowners want to refinance. Direct advertising to these clients is working. But you have to remember this won’t last forever. It’s essential that you differentiate and streamline your advertising process so that you can make the most of a very lucrative time in the industry.


[caption id="attachment_12000" align="alignleft" width="150"]K. Justin Restaino K. Justin Restaino[/caption]

K. Justin Restaino is vice president at Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. Reach him at (800) 544-8060, ext. 204, or [email protected]. Visit for more information.