Interest rates have dropped below 4% and have sunk into the low 3’s. Over 24 million homeowners with an outstanding mortgage have a first mortgage rate above 4%. Looking at credit scores and current standing, about 13 million of these homeowners are viable refinance candidates. These are your customers! How do you keep them in your portfolio? How do you keep them from leaving to your competition?
Leading mortgage companies are using daily customer monitoring to match daily credit bureau mortgage applications (also called inquiries or triggers) to their customer files. How can this benefit your company? Customer credit monitoring will show you which of your customers are in the market for a refinance. Of course, you want to identify as many as possible, but be careful. All customer monitoring solutions are not created equal. Think of each customer you identify and save as thousand’s of dollars off of your bottom-line. Don’t you want to identify as many of your attrition customer’s as possible? Here’s how.
First, utilize all three bureaus. I know what you are thinking. “Mortgage companies pull tri-bureau credit reports so all 3 bureaus should have the same information”. Wrong!!! In our analysis, any of the three main credit bureaus will have up to 70 – 75% of all triggers. To increase that percentage, you have to add in one or two of the other bureaus. There are various reasons for this, if you’d like to know them, feel free to call me and I can give you examples and go into more detail. Just know that if you don’t use at least two of the credit bureaus in your monitoring, you should not scratch your head wondering why you have customers paying off their mortgages who were never added to your marketing funnel through your credit trigger solution. Use multiple bureaus.
Second, compare data providers. If you are using a 3rd party company that has all 3 bureaus, make sure they have updated data and that their matching logic is catching as many of your customers as possible. We provide mortgage companies with a free analysis where we will match their customer files to all three bureaus trigger files for 30 days and we routinely find 30 to 40% more matches than the market “leader”. We recently provided a regional mortgage company a 300% increase on their customer monitoring. Make sure you are working with a company that has expertise in data processing and matching algorithms. Also, use everything at your disposal including address, email address, phone number and SSN to find as many customers looking to refinance as possible.
Third, if you are intent on reaching ALL of your customers, use risk and retention triggers. While prospect triggers are easier to get to and are a smaller investment (cheaper), they are missing consumer’s who have opted out of credit offers. You will have to change your messaging and marketing to these differently, but it can be well worth it to retain your best customers… all of them.
So, if you are a mortgage lender and customer retention is a concern for your company, look into these three areas to reduce attrition and improve your bottom line.
Altair (www.altairdata.com) has been a leader in the Financial Marketing industry since its inception in 2001 helping lenders to acquire, retain and maximize customers through direct mail, email and digital channels. With access to credit bureau data and the nation’s largest demographic database, Altair combines superior data with innovative strategy and analytics to achieve maximum results for mortgage lenders, banks, consumer lenders, and auto lenders. In addition to financial marketing, the Altair team also works extensively in Healthcare through it’s Braintree Health Marketing division (www.braintreehealthmarketing.com) to develop custom patient-targeting models for the nation’s top veterinary, dental, and hospital marketing teams. Altair is located in Franklin, Tennessee.