New products protect lender portfolios by preventing runoff

BOSTON, MA February 8, 2001 — Every year, mortgage lenders expect the spring home buying season to signal the beginning of what lenders call "the planned runoff" in their residential mortgage loan portfolios. This year however, the combination of a recent drop in interest rates, a still-hot housing market and the shadow of competition from E-lenders means consumers have more choice and more reason to run off than ever.

This predicted yet unprecedented runoff for this coming year has inspired not only fear in top lenders, but a response from two of the industry's leaders, Brick and Mortar stalwart Freddie Mac and the Internets leading real estate information company, Domania Inc.

Domania announced that their product, PortfolioProtect, is available to lenders and mortgage banks as of today. According to Freddie Mac, their product, "Financed Permanent Buydown Mortgage" allows lenders to protect the servicing portfolio from runoff during refinance booms and offer better rates to customers. "But that product only works," said Domania president Ellen Bossert, "if the lender can maintain communication with the borrower. Domania's solution is content-based and doesn't rely on customer brand loyalty. In fact, it assumes there won't be any." The facts prove Bossert out. According to MGIC, the nation's largest provider of mortgage insurance, 75% of loan runoff will go to a different lender.

Domania's solution, PortfolioProtect, consists of personalized, content-based, subscription-only email messages that are sent by Domania's sophisticated behavioral modeling tool after it identifies those visitors who are ready to buy, refinance or prepay a mortgage. At the program's core is Home Price Check, Domania's flagship service that provides more national home sales coverage than any other Internet site. According to Domania statistics, home price data generates a better response than traditional bank offers consisting of "rates and programs." Domania's runoff prevention products are available today for lenders. "Mortgage lenders need personalized marketing that cuts through the clutter", said Bossert "PortfolioProtect brings the Internet's greatest strength to lenders: targeted one-to-one marketing."

Domania reported that consumers are responding to its online direct marketing program at a rate of 15 to 40 percent. This far surpasses the average response to conventional direct marketing (2 percent) and online banner advertising (.4 percent).

Some of the nation's most innovative mortgage lenders and real estate firms, including LoansDirect and zipRealty have turned to Domania. "They see Domania as the company that can provide turnkey email marketing solutions to help them expand their Web presence, establish an ongoing dialogue with potential homebuyers, generate qualified leads, and protect their existing mortgage servicing portfolio," said Bossert.

According to the Direct Marketing Association, emails and search engine positioning approaches to marketing not only drive traffic, they are more effective as customer acquisition and retention tools. In a recent study, the DMA found that sending emails to customers ranks first on the effectiveness scale. As a result, it predicts that Internet driven direct marketing sales through 2004 will grow 50 percent a year to $84.4 billion.

About Domania, Inc. -- Domania, Inc. is a financial and marketing services software company that provides innovative customer acquisition and retention products to banks, mortgage lenders and Realtors. The company also operates the consumer real estate Web site, www.domania.com, rated among the top financial Web sites by Money Magazine. Domania's Home Price Check™ provides historical home price data through such prestigious partners as America Online (AOL), Dow Jones, Realtor.com, CBS MarketWatch, MonsterMoving, and The Motley Fool. Based in Boston, MA, Domania was founded in 1989 as INPHO, Inc.