Originating: From Lead to Loan

Written by Adam Jay Shulman, as originally published in The Reverse Review.

How can you predict your business revenue if you don’t have the proper tools? A lead management system is the No. 1 tool for any mortgage company wanting to maximize its lead-cost investment.

With the high price of leads these days, no company can afford to take them for granted. Most of the lenders I have worked with provide loan officers with leads worth hundreds of thousands of dollars on a monthly basis. With an investment like this, there has to be accountability. One way to achieve that accountability is by effectively utilizing a lead management system.

Lead management systems allow your sales staff to track all aspects of a lead’s history, which is essential to evaluate company practices. A common mistake is to look only at how many leads were purchased in a given month and compare that figure to the number of fundings. The most important conversion is leads bought versus leads funded. A lead management system will allow you to measure your business at each point in the sales process, enabling you to calculate the percentage of your business that will make it to the next level in the loan process.

The leadership team at your company must use the reporting tools available in a lead management system to ensure that the business is running as efficiently as possible. Tracking lead conversion, lead sources, monthly lead flow and your sales metrics is necessary so that you can forecast your productivity on a micro and a macro level.

Tracking negative dispositions is also an essential part of the day-to-day performance of your business. By noting the reasons that a lead has not moved forward, you can learn more about the niche product that we sell. For example, is your appraised value of a property lower than what the borrowers think their home is worth? Are both borrowers of age to qualify for the reverse mortgage? Even the simple “not interested,” “no sales” and “no contact” leads must be clearly dispositioned every time a loan officer touches a lead. If you note each of these negative dispositions properly, you could create a pipeline of future leads that may be qualified in the future.

The reporting tool can help you assess other important stats as well. Are certain states more likely to convert? Are you buying leads where home values constantly come in low? Having a history to look back on allows you to target leads that will give you the best opportunity to make the most profit. I have been lucky to have been surrounded by some of the best loan originators in this industry. All of them use systems that make their businesses run at top efficiency.

Once your company makes the initial investment in a lead management system that fits your organization’s needs, you must make sure that your loan originators are taking the necessary steps and using the system properly, or your data could be inconsistent. The key is to show your loan officers how the system can help their business. It really is amazing how easily leads can be lost, and by using a management system properly, leads can be sorted and prioritized to maximize efficiency. With such a system, a loan officer can sit down at the beginning of a day to plan his or her time around a well-organized call list for that specific day. It’s like having a game day playbook to follow.

Recycling leads has been a common practice in the reverse mortgage industry for years. On my sales floor, 15 to 20 percent of our monthly originations come from recycled leads. Just because someone has interest in our program in a given month 8 doesn’t mean that they are looking to purchase a reverse mortgage that same month. The shelf life of reverse mortgage leads is long. It’s not uncommon for a lead to convert a year from its original lead date. Sometimes it takes a couple of different loan officers to convince prospects that the reverse mortgage can be a solution to their financial or lifestyle needs. It’s great for you to have a tool that can easily transfer your leads from one loan officer to another and enable you to track them through their lifecycles.

With the new licensing requirements in our industry it can take a tremendous amount of expense and time to bring a new loan officer into the business. With a proper lead management system, you should be able to pinpoint where a new person is having trouble converting leads. When you have a more complete picture of the loan officer’s strengths and weaknesses, you will be better prepared to train them.

As an owner or manager, you always have to be checking under the hood of your business. You need to make sure that all the parts of your operation are running smoothly. Sometimes a bad month can be a symptom of the previous month’s activities. Do you want to wait until it’s too late to recover, or do you want to diagnose the problem early enough to correct a negative trend? A lead management system can help you assess and solve an issue.

A sales organization needs to be constantly growing and changing to be relevant in this industry. What we do today might not work in the future. As the HECM product becomes more mainstream, the competition will only increase. A strong lead management system is one way to help your company stay ahead of the curve.

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