Domania Leads Countrywide to Homebuyers

As the housing market begins moving towards the spring season, purchase loans are expected to replace the significant volume of production from the refinance boom.

Countrywide Home Loans in Calabasas, Calif., has started targeting homebuyers ready to sell their current homes by working with borrower profilers Domania Inc. in Boston.

Countrywide uses Domania's services for customer retention in its Seller's Advantage program created mainly for current Countrywide borrowers.

Seller's Advantage is targeted to a broad audience in the company's servicing portfolio since detecting sellers in a purchase market that usually focuses on first-time homebuyers is a difficult process, according to David Doyle, executive vice president of consumer direct production at Countrywide.

"The objective of the service is to help [customers] sell and buy more intelligently," Doyle said.

Countrywide realized that the refinance boom would eventually come to an end and decided to focus on capturing more purchase business, according to Bernie Dietz, vice president of business development at Domania.

Part of that strategy is customer retention.

"Retention has remained the hot issue because it is so poor among mortgage companies," Dietz said. "Ninety-three percent of the time, when someone gets a purchase money loan, they go with any lender other than the prime lender which is just abysmal."

Countrywide is working with Domania to recapture the customers planning to sell their home and search for a new home.

"It's a hard thing to sell a home and buy a home at the same time," Doyle said. "We're trying to help our customers maximize the process."

Domania uses its "transaction marketing" technology to detect consumers most likely to purchase a home against a "Home Price Check" database of 26 million homes used for real estate research.

In discussions with Countrywide, Domania officials pointed out that the Home Price Check could interact with the customer base to find customers who are likely to be run-off risks and intercept them before competing lenders find them, according to Dietz.

Steve Kropper, chief executive officer of Domania, said that Countrywide is sophisticated in its tools to refinance run off risks, but the industry has still not addressed finding the purchaser.

"There have been many refi tools, but we believe we are bringing the first effective purchase retention tool to the industry," Kropper said.

Domania's products include a "Portfolio Protect" program combining software and marketing services that focus on turning existing customers into repeat buyers.

The servicing portfolio combined with "Home Price Check" and a scoring engine to analyze behavior patterns generates emails targeted toward Countrywide's customers.

Countrywide's objective is to retain customers while providing sellers with a maximum price for their house, and to maximize the net price after the sale so that the sellers will have the most funds from their sale to purchase a new home.

Seller's Advantage delivers email advice on how to sell and purchase a home and provides data on prices and values of homes that sellers are looking to purchase.

"We allow both customers and non-customers to sign up but it is targeted toward our current customers," Doyle said.

Mortgage lenders including IndyMac Bank, GreenPoint Mortgage and J.P. Morgan Chase work with "Portfolio Protect," and Domania is the "home price vendor" for companies such as America Online and CBS Marketwatch.

Prospecting consumer behavior patterns is something that Countrywide and other lenders have not put much time into, but Domania's software could be integrated into lender systems within three to four weeks, according to Kropper.

He added that lenders are skilled at lending, but Domania has focused on consumer behavior and lending decisions over the past seven years.

"The bank moves from a place where the customer sends a check every month to a partner in owning and buying," Kropper said.

Domania performs 95 percent of the work, including the private label version of the "Home Price Check" pool, specifications on the lender brand display and setting up the email communication.

While most lenders do not have a relationship with borrowers, real estate agents tend to have stronger client relationships. Domania makes the lender more like the real estate agent by sending out emails on comparable properties, according to Kropper.

The Domania database is now up to 28 million records with 83 percent of disclosed sales and the scoring engine continues to learn from the process of user behavior.

By educating the servicing customer base, the email campaign is able to send comps that keep up with local prices to show equity in the home, property taxes and to satisfy the seller's curiosity, according to Kropper.

And with more behavioral information, there is a greater chance it will lead to taking an application, he added.

"We can correlate between curiosity and a transaction," Kropper said.