The mortgage lead generation model as we know it is severely broken. Not surprisingly, it has been broken for quite some time. Need proof? Ask any consumer that has submitted their information via a “LowerMyBills” style application (where you can compare rates by receiving quotes from 4 or more lenders) to get mortgage rate quotes and ask what their experience was like. Enough said.

The two main issues cited by those that have requested a mortgage quote online are:

1. I received a barrage of calls and lenders were overly aggressive.
2. The calls didn’t end after the initial application period, they continued for weeks and months, sometimes 6 to 12 months or more.

The Issue: The top companies in the mortgage lead industry vertical have failed to exhibit the leadership necessary to innovate and evolve the stale and consumer unfriendly mortgage lead model currently used today (LMB style application). The industry has also had more then its fair share of issues with customer data leaks and the over-selling of leads is a pastime of sorts, like baseball for the lead generation industry, if you will. These issues have been discussed within the industry, among consumers, and among industry watchdogs for years, but not a whole lot has changed. The industry as a whole has declared churn and burn as its motto and model by proxy via its actions.

While the industry is great at A / B testing to find out what layouts, copy and form types convert the best, improving the consumer experience is simply an afterthought that gets little to no attention. The time is long overdue for the industry to address the consumer experience as it relates to consumer control of how personal data is used, how and when the consumer is contacted and what happens to the data after the consumer requests a rate quote.

Why the Industry Should Care: Simply put, improving the customer experience will improve your bottom line. In the booming market of years past, the short-sighted approach taken by the industry (and today) in how it treats consumers may have worked, but in the future, lead aggregators that put their own interest in front of consumers will pay the price in the form of lost repeat business, lower revenues and lost business to those that do improve the consumer experience. The existing model is so obtrusive that many consumers put off getting rate quotes until the very last minute or at all as opposed to checking the market at regular intervals to see if a refinance makes sense for them. The end result is that consumers find the rate quote process so distasteful that they request less rate quotes at less frequent intervals.

How Did We Get Here: LowerMyBills has not only defined the medium through the “compare rates with 4 lenders” model and as one of the industry leaders in volume, they have the undignified distinction of setting the bar so low in marketing taste and sensibility that I have little doubt that if they could insert porn into their ads an get away with it, they would do so in a heartbeat. That’s where we stand today, a market leader with no values or ethics and an industry that is content to follow the “leader”. LendingTree’s mortgage broker bashing marketing campaigns are not much better and only serve to paint the very industry they depend on in an unflattering and unprofessional light. Where are the creative marketers that understand the benefits of building brands for the long term and the power of intelligent marketing?

On a side note, the infamous “Creative Director” for LMB (linkedin profile: here) has not included any of her famous LMB ads in her portfolio on her personal marketing site, we don’t blame her.

The Future: The company that spearheads the next generation of online mortgage lead generation by improving upon the LMB model, giving more control to consumers and addressing consumer privacy and service issues will stand to gain longer term users, higher revenues, and increased market share. Those that do not adapt to the new higher level standards will fade into oblivion.

While the next generation lead model may or may not be different radically different as a whole from what we see today, it will be branded as being radically different and this “difference” is what consumers will gravitate towards as they desperately search for a new way to get mortgage information. It is likely that one major player will take an early lead and will dominate with a majority of marketshare.

Where To Start: When a consumer requests a rate quote, this does not give lenders a license to call this person for life. Many lenders recycle their leads so that leads that are not converted go into a pile and when a new loan officer is hired, they are given the pile to prospect. This may happen over and over and is why consumers continue to get phone calls form loan officers they have never spoken to months and years after they requested a rate quote. This problem is compounded when unscrupulous lead vendors oversell leads or sell aged leads. While requiring lenders that purchase leads to only call leads for “X” amount of days might sound like a good idea it would be impossible to enforce.

One Possible Option:

Another Simple Idea:

Implementing these two simple ideas can take the existing model worlds away from where it is today, in fact there may be some lead generators already practicing one or both of these ideas already. The bottom line is that companies that embrace smart standards for providing a more helpful and healthy user experience will be more successful in the long term. Embracing transparency, data and privacy control standards, and using common sense in providing the best consumer experience possible is smart for not only for the mortgage lead generation industry, but any industry. More importantly, it’s what consumers demand and expect.

My expectation is that while some may embrace my assertions, many lead providers will vilify them and I can only hope that is the case. In certain circumstances, offending or upsetting people is confirmation you are on the right track. It is completely normal to have a negative reaction when you propose ideas or thoughts that might be considered a threat to the livelihoods of others. If the idea of change threatens you, consider that you might be looking at the issue from the wrong perspective. The change I’m writing about is a threat to those that are lazy or don’t want to change, but is a huge opportunity to leaders that are looking to innovate and thrive by improving the consumer experience.

I just received yet another call from a mortgage broker asking me for information regarding a mortgage lead company called Target Publishers. This time the broker received my information via records at the Reno Courthouse. I’ve been receiving such calls for the past two years since I first did business with Target Publishers. All of the calls follow the same script. A mortgage broker has purchased mortgage leads from Target Publishers, the leads were never delivered, Target Publishers has ceased all communication and is refusing to deliver leads or a refund and the broker is wondering how he is going to get his $x,xxx back. In the case of the latest call I received, the broker worked in a shop with 4 loan officers and had lost $6,000 to Target Publishers.

When I purchased leads from Target Publishers, the campaign started two weeks late, didn’t deliver the daily number of leads required and after around the 15th unsuccessful transfer attempt over the course of a week (all leads ended in static, echos, and or hangup) I requested a refund. After paying $1800 for a test run, three weeks later I had nothing to show for my time or money. When I attempted to contact Jacob Larson (the contact person usually mentioned in various complaint threads across the interwebs) or the owner (according to Jacob this is Darren McDowell, whom may or may not be a real person) they became abusive and stopped all communication.

I filed a BBB complaint (they’re no longer members), posted a friendly warning on brokeroutpost.com (which Darin promptly deleted, sadly enough to this day I still see the occasional brokeroutpost poster announcing that they too have been ripped off, who knows how many of these could have been prevented), and filed a small claims case in Reno with the hope they would settle out. Ultimately, I sued them in Reno Small Claims Court and won a default judgment when they did not show up. My intention was not to follow through with the small claims case because of the dollar amount, but once the ball got rolling, I figured what the heck and followed through, even though it meant having to fly from sunny Huntington Beach, CA to Reno.

Until recently, their address was a Reno address which happened to be a PO Box at a UPS store. My belief is that they actually operate out of California or Oregon. I attempted service twice without success at the UPS PO Box, once at the home of “Darren McDowell” in El Cajon, California, and once in Las Vegas, NV before successfully serving the original UPS PO Box when we learned the owner was not accepting the service when he was actually supposed to.

After winning the judgment, it came time to collect. The original Bank of America that cashed my check was in Beaverton, OR, so I naively assumed that I had to serve that specific branch in order to garnish Target Publisher’s bank account. This required filing a Foreign Judgment in Clackamas County, Oregon in order to validate the Reno judgment in Oregon. This was at least as much work as the original small claims case.
When the Write of Garnishment was eventually served, there were no funds in the account so I got nothing.

I then posed as a lead buyer to get Target’s latest bank information to see if they had changed banks. They had not, the bank account number was identical and was still used in their day to day operations. On a side note, Target does not accept credit cards, yes I know, HUGE RED FLAG. I again served the Writ on Bank of America and again was denied as there were no funds available. As long as they immediately transfer funds out of their bank account when they receive payment from customers, they seem to be protected. A call to the Bank of America garnishment department confirmed this.

The bottom line is that Target Publishers is very good at what they do. They immediately transfer funds out of their corporate account whenever they receive a payment and thus are protected from creditors like myself. They also make serving them very difficult. A quick google search of targetpublishers.com shows the three of the top five listings are discussing Target Publishers as a scam, yet they continue to operate year after year. They haven’t even had to change their name, which is the first thing they will do once they get catch enough heat.

I have a call in to Target Publishers for comment.

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