News for mortgage professionals

Featured news & tips — posted November 18, 2004

Managing your marketing and communications just got easier

In today’s business, if you want to differentiate yourself from your competition and grow, you have to market your business daily. We’ve made it even easier for you with XSellerate, which has just been released this week.

XSellerate is a customer relationship management and marketing solution that combines professional print and e-mail marketing with web-based client communication tools to help you get more leads, convert them into clients and retain them afterwards. By keeping detailed contact records for every new lead, client and business contact, XSellerate automates your marketing and client communications. New contacts can be typed in, imported from other programs, or, if you also have a Mortgage XSite, automatically imported from your lead capture forms.

With XSellerate, you can send continuous, automated e-mail marketing campaigns that can be auto-assigned by contact group (such as prospects, current clients, etc.) or assigned them manually. XSellerate automatically takes any campaign series assigned to a contact, and starts it "fresh" for them. Meanwhile, it's also sending your other contacts any items due according to their own group assignments and campaigns.

And while e-mail is effective, traditional print campaigns allow you reach those prospects with little or no access to the Internet. We've written and designed dozens of print pieces to provide helpful information about buying, selling, and owning real estate — all effective marketing messages for generating leads and referrals. You can customize any of our pre-built designs in minutes. When ready, print the piece from your computer or have XSellerate save it and send the design to your local printer. Plus, XSellerate's Marketing Aids library includes expert advice on how to advertise and market successfully in print and on the web.

"XSellerate is the next generation, online marketing and advertising product from a la mode that allows you to differentiate yourself and rise above competition in an ever changing market. We're constantly looking at new features that will allow our customers to use XSellerate as an effective CRM application," said Brian Ringer, Product Manager for XSellerate.

Get on board and take control of your client marketing and communications with XSellerate today with our special introductory price of $399 (retail $499). That gets you XSellerate for a whole year, with updates and new templates added throughout the year at no charge. Real, live human phone support is even available at no charge, 24 hours a day, 7 days a week. Don't have a Mortgage XSite yet? Bundle XSellerate and XSite together for the special $1,199 price (retail $1,499).

To order call 1-800-ALAMODE. Hurry! Both offers end November 19!

a la mode's digital signature sparks interest at technology conference

Our new digital signature capability was well received last week when we were invited to discuss the ever-popular topic of electronic real estate transactions at the E-Records and E-Signatures: Emerging Technology and Business Applications in Financial Services conference held Nov. 8-9 at the Crown Plaza Hotel in Washington D.C. The conference, sponsored by the Electronic Financial Services Council and Glasser LegalWorks, focused on the latest developments in electronic signatures and records.

Attendees learned what the mortgage banking industry is doing to facilitate online shopping, ongoing efforts to originate e-mortgages and sell them to Fannie Mae and Freddie Mac and talked with colleagues about the paths they are following to realize the efficiencies and economies that electronic transactions provide for their companies.

Once any company has made the decision to go online, selecting the right signature technology that balances security and authentication with ease of use is a critical decision. Our counsel, Jennifer Sides, discussed our digital signature technology in a panel session entitled, "Which Signature Technology is Right for Your Company?" along with representatives from Wells Fargo and Principal Financial Group.

How our e-signatures work
Launched at the Mortgage Bankers Association annual conference last month, Sides explained that our legally-binding and standards-compliant digital-signing capability uses Wave System’s eSign Transaction Management Suite (eTMS), allowing XSites users to manage business processes and transactions entirely online — without the need for ink signatures.

"Our digital signature system creates, authenticates, signs, stores, and provides ongoing access and lifecycle management of digitally signed documents such as Mortgage 1003s and purchase contracts," Sides told the audience.

Using their DirectFax™ Document Manager, mortgage brokers and borrowers can convert paper documents to PDF and/or simply upload existing PDF documents. Once in the loan file, the broker tags the document for signing using the "Signatures" button on the toolbar.

Once the document has been "tagged" for signing, an e-mail is sent to the borrower informing them that a document needs to be signed with a link to get back their personal login area on the broker’s XSite. A panel will show the borrower documents related to their loan with an icon indicating which documents need their digital signature. Clicking the "sign" link will prompt the Document Signing Wizard to load and will walk the borrower through the signing process. The authentication and signing process is identified by the registered trademark SmartSignature.

Security issues addressed
With the rise in identity theft on and off the Internet, security and authentication have become crucial issues to address with any digital signing capability. Panel Moderator Frank Supik of Buckley Kolar LLP asked how our technology ensures that the correct user is being authenticated.

"The first step in preserving document integrity is to verify the identity of the parties involved," Sides explained. "Our authentication process requires the collection of certain key information from the individual user, which is then transmitted by Wave to Equifax for a data integrity check. In addition the user is presented with an interactive query questions regarding his or her credit history. Once the individual is authenticated, Wave securely transmits a certificate request to its Certificate Authority (CA). The CA will create the digital certificate immediately and Wave will present it to the user for installation."

Further, unlike many of our competitors, our e-signature platform uses a Public Key Infrastructure (PKI) system, which seals the transaction in the most secure way available today. The PKI system integrates digital certificates, public-key cryptography, and certificate authorities into a total, network security architecture. A typical PKI includes the issuance of digital certificates to individual users and servers; end-user enrollment software; integration with corporate certificate directories; tools for managing, renewing, and revoking certificates; and related services and support.

Just doing our job
Our digital signature system certainly sparked the interest as we were the only company at the conference providing such technology to mass markets. But we think of it as just another service that will help our customers run their businesses more efficiently.

As Sides puts it: "In keeping with a la mode’s business objective of providing our customers (mortgage brokers, appraisers, agents and field inspectors) value-added services consisting of best of breed technologies, E-signatures was at the top of the list to maintain our commitment to lead, not follow, as it relates to emerging technologies."

Consumers prefer mortgage brokers over direct lenders

Although slightly fewer than one-third of mortgage shoppers use a broker to help them find their current mortgage, those customers who do tend to be very satisfied with the lending experience, according to the J.D. Power and Associates 2005 Home Mortgage Study just released.

Among consumers who responded to the survey, 29 percent indicate that they contacted a broker to help them find their current mortgage. Those customers who used a broker tend to be substantially more satisfied with the broker personnel compared with those who interfaced directly with the lender’s personnel.

"Brokers appear to perform significantly better in meeting customer expectations," said Jeremy Bowler, director of the finance and insurance practice at J.D. Power and Associates. "Brokers are perhaps more dependent on customer referrals than the direct lenders. As a result, brokers may be more in tune with the cause and effect of customer satisfaction and advocacy."

However, those customers who contact a broker while shopping but then apply directly to an originating lender appear to be the most satisfied with the mortgage origination experience.

"While this is the case for only 5 percent of all mortgage customers, those direct-to-lender customers who comparison shopped with at least one broker rate both the lender personnel and the loan application and approval process higher than do customers who never contacted a broker in their shopping process," Bowler said.

The study’s Customer Satisfaction Index is based on four key factors of the mortgage lending process. Day-to-day administration of the account is the most important factor, accounting for 32 percent of overall mortgage service satisfaction. Billing and payment experiences are nearly as important (30 percent), followed by the loan origination process (21 percent) and the customer-initiated contact experience (16 percent).

"With rates on the rise, lenders have seen a decline in call-center call volumes from shoppers," Bowler said. "However, for those customers who do contact their lender with a question or problem, the way the lender handles their needs is critical in influencing their long-term impressions of the lender, and their likelihood to consider their current service provider the next time they’re in the market for a home loan."

Timely resolution of a problem has the greatest impact on customer contact satisfaction. The longer it takes to resolve a problem, the lower a customer’s satisfaction is with their contact experience. About one-half of all problems are remedied within three days, but customer satisfaction declines dramatically when a problem takes more than one week to resolve.

"This can have a profound impact on customer loyalty and customer recommendations," Bowler said. "The likelihood that a customer will offer a personal recommendation for their loan service provider decreases by almost one-half when they are not completely satisfied with their lender."

News briefs

Borrowers save money by opting for commuter-friendly homes
Instead of looking to live near parks, schools and shopping malls, more and more are starting to look for their new home close adjacent to the train or bus stop. That’s because a program offered by Fannie Mae offers incentives to buyers that opt for neighborhoods near public transit.

The program, called Smart Commute Initiative™, recognizes the transportation savings that home buyers can realize by purchasing a home located in transit-accessible communities (as determined by Fannie Mae's methodology) and allows lenders to add $200 to the monthly qualifying income of a single wage-earner household and $250 for a two wage-earner household.

The additional income represents a portion of the savings the borrower should receive from using public transportation.

The program also features enhanced underwriting flexibilities for families earning up to 100 percent of the area median income. These borrowers can make down payments of 1 percent or $500, whichever is less, from their own funds, and reserve requirements are waived. All borrowers must meet credit parameters.

The Initiative also allows home buyers to save money on maintenance of their cars.

"Transportation costs are the second largest expense for most households, after rent or mortgage expenses," said Missouri Representative Wm. Lacy Clay (D), when the program was launched in St. Louis last month. "For many families, car payments, maintenance, and fuel total almost one-third of household expenses. This initiative gives families who elect to purchase homes near public transportation more buying power."

If you have a customer inquiring about the Smart Commute program, it’s important to let them know that mortgages under the program require a down payment of 3 percent from the borrower's own funds. And, while there’s no income limit to qualify, borrowers are required to have two months of mortgage payments in reserve.

Many big lenders, such as Countrywide Home Loans, GMAC and First National Bank have signed on to offer Smart Commute loans in many of the cities and states that offer them. In addition to St. Louis, the initiative has been launched statewide in New Jersey and Delaware and in cities such Dallas, Milwaukee, Portland, Ore., Duluth, Minn., Cleveland, Pittsburgh, Atlanta and Baltimore.

Home prices continue to rise in most metro areas
Tight housing inventories continued to drive home price increases in most metropolitan areas during the third quarter, according to the latest survey by National Association of Realtors® (NAR).

NAR's third-quarter metro area home price report, covering changes in 127 metropolitan statistical areas, shows 45 areas with double-digit annual increases in median existing-home prices and 11 areas posting small declines.

The national median existing-home price was $188,500 during the third quarter, up 7.7 percent from the third quarter of 2003 when the median price was $175,000. The median is a typical market price where half of the units sold for more and half sold for less. In the second quarter, the annual price increase was 8.9 percent.

David Lereah, NAR's chief economist, said the rate of home price appreciation is cooling.

"Nationally, the annual rate of price growth is slower than in the second quarter, and that is good for long-term gains in the market," he said. "Home prices are still rising faster than historic norms because we continue to have more buyers than sellers. However, those conditions vary widely with the greatest pressure on home prices in California and Florida."

"In the relatively small number of markets where prices were down slightly, there was some local economic weakness from a soft labor market, an unusually large supply of homes available for sale, or both," Lereah said. "However, none of these areas had experienced rapid price growth and we see no evidence of price bubbles."

The strongest metro area price increase was in the Las Vegas area where the third-quarter median existing-home price of $283,200 was 53.7 percent higher than a year earlier, the highest rate of price growth ever measured in any metropolitan area.

Next came Bradenton, Fla., with a median price of $248,000, up 40.7 percent from the third quarter of 2003.

Third was the Riverside-San Bernardino, Calif., area, at $311,700, up 36.2 percent from a year ago.

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