4 Easy Steps on How to Create an Effective Loan Modification Direct Mail Piece

Jan. 14, 2009 - PRLog -- Even though there is a plethora of homeowners needing a loan modification originators are still having a hard time reaching this new market.

What if I told you I created a direct mail piece that generates an amazing 20 to 30 percent response?
That’s not a mistake, I really mean 20-30 people out of every 100 loan modification direct mail pieces mailed will call you!

I send 100 pieces per week, at a cost of about $45-$60 (Including Postage), of those I’ll typically get 20 to 30 incoming calls. These will generate about 8 to 10 new mini applications per week which is all I need to reach my current goals of 4 to 5 loan modification appointments per week.

Creating the Mailer

Clearly, it should be no shock to discover that in order to generate this type of response from a direct mail piece, it’ll most likely be unique & aggressive. There are two components to my direct mail campaign, both packaged in a single envelope. The first is an endorsement letter that simple says, “Our records indicate that you’re in an area that is known to have higher than average foreclosure rates and we can help! Please call me at your earliest convenience at (Phone number) regarding the enclosed document,” followed by my name and signature.
The second piece is what really gets the attention of the homeowner, which also seperates this piece from any other piece they’ve ever seen. It also customizes the campaign so the homeowner knows that this is not just some random direct mail piece and that someone really knows the situation their in.  This gives me an incredible amount of leverage, because I’ve purposely targeted this market and they know I’m not just some random person. The second piece is what helps generate a huge response, a copy of their Deed of Trust.

The Deed of Trust is perceived by most homeowners to be a very private financial document.
Of course the reality of it is that it’s public information recorded at the county clerks office available to anyone who’s interested in it. However, most homeowners aren’t aware of this, so curiosity plays a role in the effectiveness of this mailer. Another reason for the high response is that the homeowner knows their situation and have already taken steps to get their loan modified. They’ve tried to refinance, sell, negotiate and when all options run out, foreclose on their property. So when this direct mail piece comes, it’s something they’ve been wanting and looking for but with no luck.

So when they realize that someone has a copy of their Deed of Trust, they immediately question who it could be from and what it is regarding, especially because they also know someone already knows what their situation is.

Some of the incoming calls will be from homeowners that might seem a little confused or surprised at the prospect of someone (Me/You) having access to their legal documents.  Some callers may even be a little put off or upset by the mailer, because they thought it was regarding their late payments or up coming foreclosure. Use those calls to explain your position and take the opportunity to inform them about your services.
Homeowners that are behind on their mortgage may be concerned that this is another letter from their lender, or collection company warning about foreclosure. Once you reassure them that you’re there to help, you will almost always get their cooperation and mini-app over the phone, including an appointment to meet face to face. You’d be amazed by the results.
In addition to the county clerk’s office, you can also get deeds from the title company you work with, although most title companies don’t have the resources to pull unlimited deeds or deeds targeting certain areas or homeowners. If not don’t worry, you can get proprietary software to pull an unlimited amount of Deeds of Trust from www.MortgageDirectMail.com and learn more on how to get copies of deeds.

Eliciting a Response

The two piece mortgage direct mailer isn’t the only reason for this amazing response.  There are other aspects to why this loan modification direct mail campaign is so successful. For example, the way the name and address of the recipients appear on the envelope is a factor along with the envelope itself.
There is a reason the national response average is less than one percent. Homeowners and consumers hate junk mail and junk mail is easy to spot in most cases. When they spot it, they tend to toss it away in the trash, before ever opening it. Over 90% of all junk mail is never even opened. So when doing a loan modification direct mail campaign, your first goal is to get the homeowner to open the envelope. Sounds simple, but many people don’t think about this first simple step. That is one of the major reasons for the much lower response rate.

Here are four easy steps for creating a successful and appealing direct mail piece:

Step One
Start by creating a compelling direct mail piece, or you could use the example described above. You can even invent one of your own that will induce a high response. Try not to cram too much information in the mail piece. It’s not necessary to mention the exact details of what the piece is concerning, if you mention too much there’s no need to respond to your services in the mailer.

Step Two
Determine which market you’d like to target. For instance, do you want a response from homeowners that need a loan modification that have ARM? Also, what loan amount would you like to target? What about location and area? The fact is, there are some areas that have higher rates underwater homes than others. In Colorado the worse underwater homes is zip code is 80018 in Aurora. Almost 65% of all homes purchased within the last 5 years is upside down in that area! So, focus on the areas you’re most likelly to succeed. Next, compile a list of homeowners on which to focus your marketing efforts.
You probably already have a similar list in your database. If not, call some of your contacts and title companies, many will produce a complimentary list for you. Or you may want to purchase leads from a reputable company.

Step Three
Now that you’ve got your mailer and address list, the next very important step is to hand address each mail piece you’ll be sending out. Remember that this is helping you disguise your mail piece from a junk mail piece, to an important business mail piece.
This is going to take some time, but the results will be worth it. If you really don’t have the time and you don’t have an assistant, you can recruit your children, hire a temporary assistant, or enlist your friends help.

One of the most important steps is taking the time to invest in hand addressing your envelopes. This is a critical step that will convert what would look like a junk mail piece to an important time sensitive mail piece. This is one of the steps that will increase your  response rate substantially.
This is the part that gets them to open the mail piece, most junk mail is not hand addressed, and don’t forget that over 90% of all junk mail is never even opened.  Additionally, I have found the effect to be even greater when I don’t use a company envelope of put a return address. You may choose to simply put your name and address, but leave your company name and logo off. Many people are turned off by unsolicited mail of any kind, and this is a way to circumvent that.

Step Four
Last but not least is to use regular first-class postage and not bulk rate. Remember, you don’t want your direct mail piece to look anything like a junk mail piece and all junk mail pieces use bulk rate, which is a dead give away that it’s junk mail.

Oliver Maldonado is a Mortgage Consultant, National Sales Trainer, and Author of The Mortgage Book and The Greatest Sales Book in the World.
720-364-1884 For more information visit www.LoanModificationDirectMailLeads.com

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Sales & Marketing Organization specializing in the Mortgage Industry. Oliver Maldonado is the Nations #1 Mortgage Sales & Marketing Guru.