Need Mortgage Help?
Fast Mortgage Rate Quotes

The Evolution of Online Mortgage Lead Generation

Comments (1)
Bookmark and Share

(Disclosure: I receive income from websites I own and build that generate mortgage leads.)

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:

Disposable Phone Numbers
Lenders are not given the real consumer phone number when they purchase a lead, but a disposable number that will direct them to the consumer, but only for “X” amount of days. This allows the consumer to give the lender their direct phone number if they choose, otherwise they will never hear from the lender again after “X” days have passed. While lenders will object to such an idea, consumers will love it. This would clearly serve the consumers’ best interests.

Another Simple Idea:

Allow Consumers to Choose How Many Lenders Will Receive the Quote Request
If a consumer wants to get a quote from two, three, or more lenders, they should have that ability. I can hear lead generators shaking their heads right now thinking: “But wait, if they will choose less then four lenders to communicate with that means we will make less money……in fact, that could cause the bottom to fall out of the industry as we know it!” The truth is that consumers are more likely to get rate quotes at regular and more frequent intervals if they know they will not have to deal with the ongoing saga of obtrusive calls that typically follow requesting a rate quote.

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.

Tags: , , ,

Related Information:
  1. BrokerScience Homework: Setting Goals
  2. BrokerScience is Looking For Title, Escrow & Appraisal Bloggers
  3. LeadPress Has Launched!
  4. Lower My Bills Hall of Fame
  5. Target Publishers Continues to Scam Mortgage Companies

Trace Richardson has written 638 articles on BankChirp.com

I'm Trace Richardson and am the founder of LeadPress. I’m a licensed California Real Estate broker and a former equities trader previously holding the Series 7, 63, 55 and 24 securities licenses.

Contact the author

1 Responses to “The Evolution of Online Mortgage Lead Generation”


  • Trace- I agree with you. I think LMB and LendingTree have become supernovas which are now imploding, or will at least shrink significantly. Most consumers are fed up with the hassle of having four lenders call and still not getting straight answers.

    New sites are emerging now which will empower the consumer with correct answers and give them their privacy by providing the next generation of purchase money and refinance calculators. However, they need to be “web 2.0”, meaning they have to be a personalized and accurate resource to the consumer.

    By the way, your mention of embracing transparency and privacy sounds like you might like Zillow?

Comments are currently closed.
Mortgage Rates