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LeadPoint Sees Record Requests for Mortgage Quotes
By James Comtois
Despite the downturn in the mortgage business, online leads exchange company LeadPoint has experienced a substantial rise in requests from consumers for contact from a mortgage originator. In fact, the company said it received a record number of consumer requests for mortgage products submitted to its LeadPoint Exchange during the first quarter of 2007, up a staggering 172% over the first quarter of 2006 and up 28% over the fourth quarter of 2006.
While the increasing number of subprime loan defaults has caused lending company bankruptcies and trouble in the online mortgage sector, which has in turn shaken the industry, large lenders are using LeadPoint to access and bid on the highest quality mortgage leads available, driving an increase in successfully closed loans.
Marc Diana, CEO of LeadPoint said that although the industry is changing and many in the lending industry are facing tough times, the consumer demand for mortgage products remains high. The refinance market, he said, "is slowing down a bit overall. However, LeadPoint continues to gain more and more market share. When I look at 'same store' performance, I see the volume of leads generated remaining fairly consistent. Consumer interest remains high, but the ability for the lender to service the consumer has changed.
"This centuries-old industry isn't going anywhere, so it's definitely a game of 'slow and steady wins the race.' We all just need to be more thorough with analyzing the deals as they get into the pipe."
Founded in 2004, LeadPoint offers a pay-for-performance model. Although it currently operates in numerous verticals including consumer lending, consumer credit, automotive lending and business services, its mortgage sector, according to Mr. Diana, is oldest and by far the largest in the company's platform.
LeadPoint's auction-style model allows buyers to bid only on the leads most beneficial to them, allowing lead buyers to be more efficient and focus on closing deals and growing their businesses.
"We continue to see strong consumer demand for mortgage products and are delighted that we can connect these shoppers to our lenders," said Mr. Diana. "When lenders can specify the exact price and criteria of a lead before purchasing it, they diversify their risk and are better able to weather downturns in the market."
He added that the company expects to see consumer requests for mortgage quotes grow for at least the next two quarters.
"The key is for the lenders to insure that their loan officers are best equipped to close and service consumers in this changing environment, so that may take a little training and education, because the tactics that were used in the past five years are becoming obsolete in an interest-rising market. There are new barriers and new types of questions that consumers are asking that loan officers need to answer."
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