Mortgage Lead Companies: Heroes or Carpetbaggers?
Mortgage Lead Companies: Heroes or Carpetbaggers?
“What is a mortgage lead?” I was asked this the other day by a friend who heard it in a talk show. I told her to Google it, to which she replied (a little cryptically I have to say), “You try.”
I was intrigued. In this day and age of search engines and Wikipedia, I couldn’t believe that there is anything still “undefineable” under the sun. So I ran to my computer and searched the internet. Although typing in “mortgage lead” in Google resulted in a huge number of hits (14,300,000 hits to be exact), all of the top sites are just companies offering mortgage lead services. So what is it exactly?
After looking at some of the top sites, and asking a couple of friends with business degrees, here is what I discovered. A mortgage lead is basically a person who is interested in putting his or her house up for mortgage. But first let us define what a “mortgage” is, because the word can be used in a variety of contexts.
When you “get a mortgage”, you borrow money from a bank to buy a house. The house will not be officially yours until you have fully paid the total amount. Once you own the house, you can use it as collateral for a loan. In this case you are “re-mortgaging” your house to secure a loan from a bank or a “mortgagee” or a lender.
So what then is a mortgage lead? In these very tough financial times, with companies downsizing resulting in people losing jobs, many are turning to mortgaging their homes to secure loans that will pay for their credit card debts, or to pay for schooling, or, as is often the case, to just plainly make ends meet. To take advantage of the situation, some enterprising companies have decided to come up with a listing of the people (or “leads”) interested in getting loans, and offering the list of leads (for a fee, of course!) to financial institutions or money lenders, who will then contact the leads and try to close a deal with them. So basically, these mortgage lead companies are playing matchmakers, hooking up lending organizations with potential borrowers.
The concept of supplying lenders with mortgage lead may sound a little like “carpetbagging” to some people, but these companies do provide a legitimate service. By connecting people in need to people who can provide.