A recent report from ATTOM Data Solutions confirms what lenders and mortgage experts have been witnessing across the nation: A number of property owners are accruing "impressive stockpiles of home equity wealth" amid rising interest rates and home prices. According to the report, nearly 25% of all mortgaged properties in the US are "equity-rich" (i.e., the homeowner has at least a 50% equity stake) - a notable 5% increase from 2015.
Simply put, more and more homeowners are preferring to simply stay put. This poses an interesting challenge for mortgage companies who struggle to conduct successful business in a slow market.
Many of our most recent projects have focused on helping mortgage clients find homeowners who are eager to tap into their equity through debt consolidation, reverse mortgages, HELOCs, and other loan options that can benefit consumers who have steadily stockpiled their equity wealth.
According to research, which looked at more than 150 million US properties, certain pockets of equity-rich homeowners exist according to factors like geographic location, home value, occupancy status, and length of ownership.
So, in order for mortgage companies to strategically - and affordably - find these equity-rich pockets, the first step they have to take is to compile and filter as much data as they can. For example, equity-rich areas like Pittsburgh, Pennsylvania and Seattle, Washington may be worth more of a marketing investment than areas with a high prevalence of "seriously underwater" (i.e., a loan-to-value ratio of 50% or higher) properties.
Ideally, a mortgage company could further refine their search in these equity-rich geographic areas by sorting through the data and identifying high-value properties (i.e., those with a market value of $750,000 or more). According to research, high-value homes have a much higher likelihood of being equity-rich than low-value homes.
From there, a mortgage company could also consider factors like occupancy status and length of ownership. The ability to access and analyze these types of details could take a mortgage organization one step closer to closing more loans, even in a challenging market.
That being said, broad-range, black-and-white data will only take you so far. In our experience, the best data is supported by in-depth marketing intelligence - which mortgage companies can only gain through decades of experience, rigorous multi-source analysis, and custom research.
For example, even the most robust data set might lead a mortgage marketing expert to believe that marketing to high-value homeowners in San Francisco (which boasts a 47% rate of equity-rich properties) would lead to a profitable jump in loan volume. However, a closer look may reveal that San Francisco property owners are less likely to be married, and therefore less inclined to refinance (PDF) - an interesting fact noted in the Federal Housing Finance Agency's most recent National Survey of Mortgage Originations. Perhaps marketing to high-value homeowners in San Jose, which has a comparable percentage of equity-rich homes but a significantly higher percentage of married couples, would make the most sense for a mortgage company's marketing budget. A customized, small-scale marketing study in both areas could test this hypothesis and generate profitable insights.
For mortgage companies, identifying high-value prospects is only half of the battle - organizations also need to know how to deliver the right message to these prospects at the right time in order to close. Using mailer templates specific to audience type, properly training call center staff, and educating loan officers on market trends and best practices are just a few simple steps mortgage companies can take to make sure they use data to deliver all the way through to a sale.
And as for the rest of the steps? We've got you covered. Contact Monster Lead Group to learn more about how to take advantage of high-equity property owners in today's market.