I was just spoke to a representative at a major lead aggregator whom many of you work with that will be left unnamed (we spoke off the record) and he mentioned that they are significantly slashing their payouts for affiliates that generate leads for them. Coincidentally, I just saw this article at Leadcritic.com and it appears Lowermybills.com has also significantly slashed its payouts from $20 per leads to $6 (70% cut) and lendingtree.com has followed suit as well, although I don’t have figures.
One explanation being offered is that the current Fed Funds cut / rate decreases have sparked intense interest in the public and mortgage inquiries are up so much that companies are simply ordering less leads as they supplement their purchased leads with naturally occurring inquiries regarding lower rates. The idea being that this is necessitating a reduction in payouts by lead aggregators due to reduced revenue from mortgage companies. I’m not sure I buy this as a complete explanation as this reduction in demand for mortgage leads by mortgage companies is nothing more than a short term event, as long as there continue to be mortgages and mortgage companies needing to originate mortgages. I think there is probably an underlying issue of decreased revenues in play as well and this can also be affected by lead aggregators long term media buys and contracts that they are locked into and have to honor.
What does this mean to you? It means that now is the time to renegotiate with your lead providers, you may have significantly more leverage than you did even a month or two ago.
Author: Trace Richardson is the CEO of TraceCapital.com which provides No Closing Cost Refinance loans.
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