Written By: Karen Deis
The lead generation industry has received a lot of criticism from loan officers who have spent hundreds if not thousands of dollars on worthless leads.
There are countless stories of individuals who were charged for leads that were inaccurate or out of date. On the other hand, there are many people who are huge fans of lead generation companies and have had tremendous success with the batches of leads purchased. So is it worth the risk?
After some extensive research, we have compiled information that you need to know before signing up with a lead broker.
How They Get Their Leads To Sell To You
Lead generation companies obtain their leads from cold calling, emailing, sending out direct mail or through search engines such as Google and Yahoo. The companies that utilize the Internet to generate leads usually have the borrower complete a mini application in order to pre-qualify that lead. Borrowers use the Internet to rate shop and most of these websites advertise that the borrower will receive more than one quote from a mortgage broker. Most companies will charge you per lead while some require a minimum amount you have to purchase each month.
There are scams that companies use to generate leads.
Here’s my personal story about opting in on those “reduce your rates” emails!
As part of my research a while ago, I decided to sign up for two different e-mail offers to “Reduce My Interest Rate”. Within 3 hours, I received phone calls from 2 loan originators who purchased my lead. I told them who I was and the research I was doing and asked them how they got my lead. One loan officer told me that the lead generation company personally called me to pre-qualify me (not true). The other loan officer said he had paid $50 for this lead and did say that he knew it was generated by an internet response. I asked each how many times they thought the lead was sold. One said he was the only one getting the lead, the other said he was assured it would not exceed 5 times.
But, here’s what happened next—and it’s not pretty for those of you buying leads:
Over the next several weeks, I received no fewer than 12 calls from loan originators who purchased my lead. Again, I told them who I was and ask what they paid (about $10 each) and they also thought they were getting FRESH leads. I was still getting calls 3 months afterwards, and the loan officers were under the impression that I had only inquired days before—not 3 months.
They offer the consumers a free prize, but in order to win, they have to fill out forms and sign up for newsletters. The lead company will then sell the lead to one of its customers. Other scams include telemarketers quoting inaccurate rates and programs, then passing along the person’s information to you as a qualified mortgage lead. Some lead brokers sell leads that they know are false or out of date, which is considered lead generation fraud. Since there are so many companies out there providing mortgage leads, it is extremely important that you do your due diligence. Listed below are sample questions we asked three different online lead brokers, along with their responses.
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