Direct mail: an effective way to reach the mortgage market.

• Author: Turner, Jim
• Position: Direct Mail Essentials

Recent problems in the mortgage industry have taken many lenders out of the market ... competition has been cut significantly. But there are millions of homeowners still hoping--and many are able--to refinance at lower rates. Direct mail can help you reach them.

General media advertising can serve a supporting role in soliciting mortgage applicants. For example, print or broadcast ads can help create a market awareness of your mortgage capabilities. But selling mortgages, especially in light of the recent problems, can involve a complex message ideally suited more to long copy and loan applications than to general media. Thus, direct mail has some special advantages.

Mailings can deliver a long message and a way for the reader to respond. While a postcard can work, you might find it effective to also test larger formats. For example, the classic #10 envelope with a cover letter, brochure and application provides ample space for your message.

Response will vary widely with your execution and list, but in general, the more comprehensive and impressive your mailing package, the better your response. And, in a product with large profit margins such as mortgages, small differences in response rates have a big impact on profitability.

Few advertising media can target mortgage prospects so well as direct mail. List availability will vary widely with your geographic market because mortgage data often are gathered and reported ... or not reported ... at the county level. When full information is available, you may be able to target households by the type of mortgage they hold (fixed or adjustable), amount of the mortgage or perhaps even the rate on the mortgage. If you don't have rate information, you can roughly estimate it based on the date the mortgage was issued. Even if you can't get lists with specific mortgage data, you can use broader list...