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Home Equity Loan Marketing Down in 2007
By Brad Finkelstein
CHICAGO-Research conducted by Mintel Comperemedia here finds that direct mail campaigns conducted by lenders looking for home equity loan customers fell by 21% in 2007 compared with 2006.
Taken as a whole, marketing mailings for mortgage and home equity products declined by 30% during the period, with mortgage mailings down by 34%.
There were just 930,000 home equity product marketing mailings in 2007, compared with 1.2 billion the year before.
Mintel found that eight of the top 10 home equity and mortgage direct mail marketers had reduced their total offers sent in 2007. Of those that cut back, half had reduced their direct mail campaigns by over 60% from 2006.
"As the housing bubble continues to deflate, we can expect companies to constantly readjust," said Farah Huq, market research manager at Mintel Comperemedia. "I wouldn't expect to see dramatic increases in direct mail until the market has stabilized and consumers seem ready. Instead, I think we'll see internal shifts in the top mailers and the types of offers advertised through direct mail."
Meanwhile, one bank executive is telling consumers that now is the time to evaluate their home equity loan accounts at several banks and see if they can be improved and/or maximized.
Brad Smith, executive vice president of customer service at UMB Bank, Kansas City, Mo., said, "Homeowners need to compare offers, rates and professional counsel they receive. Even if no changes are made, they will at least have a more secure outlook and understanding regarding their current plans. On the other hand, homeowners may discover a better product and rate for their situation and a more personable level of service relevant to their needs. It's easy to switch this service and often there's no cost involved to do so.
"Homeowners should also look into a HELOC that has, at a minimum, a two-year lock on interest rates. A rate lock allows homeowners to better manage monthly cash flow and provides a level of comfort in a changing rate environment.
"People constantly review investments in their 401k and that same practice should be done with one of their biggest investments - the home. Now is a perfect time for homeowners to proactively assess the services used to manage the equity of their homes and talk to different lending institutions to ensure they have the best programs for their individual needs. Very often, a little invested time can result in positive results by saving hundreds or thousands of dollars and, of course, providing better peace of mind," he said.
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