| If there has ever been a time when the | | | | potential customers before anyone else does. It |
| mortgage market needed heroes, it's now. | | | | doesn't take x-ray vision or any other super |
| At least six million adjustable rate mortgages | | | | power to find them. Mortgage brokers and loan |
| (ARMs) are scheduled for their first reset | | | | officers now can buy detailed ARM leads (also |
| between 2007 and 2011, according to Dr. | | | | known as ARM refinance mortgage leads) for |
| Christopher L. Cagan of First American CoreLogic. | | | | around $12.50 per lead. These are not the typical |
| Millions of consumers who have been able to | | | | public records. These new, bionic ARM leads are |
| afford ARMs with low introductory "teaser" rates | | | | strengthened with detailed property and loan |
| will be hard pressed to make the new, higher | | | | information, such as initial reset date, current |
| payments they will face. At least 1.1 million of | | | | interest rate, maximum interest rate, lender |
| these loans will default over the next six years. | | | | name, loan amount, property value, available |
| What, if anything, can save consumers from | | | | equity, year built, and number of rooms-right |
| these budget-crushing ARMs? Cue the music. | | | | down to number of bedrooms and baths. Most |
| Enter the heroes: Loan Officer and Mortgage | | | | importantly, some companies can guarantee that |
| Broker. | | | | the leads they provide do not appear on the |
| The technical term for the solution to the ARM | | | | national Do Not Call Registry. |
| crisis is "market remediation"-refinancing through | | | | The new ARM leads do not permit time travel, |
| private lenders. This is the only viable option for | | | | but they do allow mortgage brokers and loan |
| most ARM customers. "External remediation," e.g. | | | | officers to see as much as 120 days into the |
| governmental intervention, is a long-shot. The | | | | future, when the lead will reset. This allows the |
| other main option, home sales, is not working well | | | | lead buyer to conduct a mailing campaign in |
| with the sluggish real estate market. | | | | advance of the initial phone call. Some companies |
| Market remediation is not driven by altruism, of | | | | even offer direct mail templates that can be |
| course. There is a lot of money to be made in | | | | populated with the lead data to make personalized |
| home loan refinancing. The market is huge. | | | | postcards and letters. |
| According to the Mortgage Bankers Association, | | | | Rising interest rates, stagnant home sales, and |
| $1.5 trillion in ARMs are scheduled to reset in 2007 | | | | fast-approaching ARM reset dates are threatening |
| alone. This includes all resets, not just first-timers. | | | | the financial well-being of millions of Americans. |
| Many of these consumers have been able to | | | | Those who can guide them to safety are poised |
| handle the higher payments so far, but they are | | | | to make a lot of money. They also are likely to |
| being stretched to the limit. | | | | become heroes in the eyes of the families whose |
| The challenge for loan officers and mortgage | | | | homes they save. |
| brokers is to locate, contact, and close these | | | | |