Leading Mortgage Lender Appends Property Data to Their Existing HELOC Customer File to Achieve Highly Responsive Marketing Campaigns

Client Need

A leading mortgage lender sought to develop a nationwide pre-approved line increase program that would boost annual net receivables and reduce attrition rates among its most profitable customers. Ideally, the solution would also streamline the internal processes and reduce operating costs associated with line increases.

Solution

We worked with the client to design a quarterly marketing program for existing HELOC customers. The client first creates a list of customers who fall within their program credit guidelines. Using our Match & Append service, we add mortgage and ownership information to the file along with current Automated Valuation Model (AVM) home values and brief legal descriptions and return the enhanced file to the client via FTP or CD-ROM. Empowered with the additional data, the client suppresses ineligible customers including those that have changed ownership and those who have competing mortgages. Using the appended AVM values, the client calculates an appropriate line increase for each qualifying customer based on available equity. The client then sends a pre-approved line increase offer to eligible customers who fall within their campaign guidelines for available equity. For customers that accept the offer, the client is able to process the line increases as modifications to the original HELOC agreement instead of as a full document refinance.

Results

Due to the highly targeted nature of this marketing program, the client has achieved an 18.4% response rate, far above the industry average. The close rate is 15.7% with an average line increase of over $45,000, resulting in more than $750 million booked in the first two years. The client also enjoys a 60% reduction in operating expenses because the line increases are processed as modifications instead of full document refinances. Furthermore, the client has seen a 21% reduction in payoff rates among the group included in the campaign, and a 58% reduction among those that responded to the campaign offer. We are working with the client to further refine and improve the program to maintain their high response rate and return on investment.