Magazine article American Banker

Home Equity Lenders Using New Strategies to Expand Markets

Magazine article American Banker

Home Equity Lenders Using New Strategies to Expand Markets

Article excerpt

Some home equity lenders have achieved phenomenal growth in the first six months of 1995 through new marketing plans, expansion of product lines, and broader geographic reach.

Here are a few success stories.

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"When we were building our marketing plan for 1995, our No. 1 objective was to attract and retain loans, and we focused on home equity," said Kirby L. Trumbo, marketing director for Bank One Colorado, Denver.

The company used a combination of media ads and direct marketing to increase its home equity volume to $203 million in June 1995, an increase of more than 100% over the level a year earlier. The bank tied its advertising to Denver sports teams, using Rockies coach Don Baylor and Broncos coach Mike Shanahan in its television ads. Bank One also focused on converting customers to 100% loan-to- value, and kept margins up by avoiding teaser rates.

The company provides a toll-free Loan-by-Phone service, from which consumers can obtain immediate approval.

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First Union National Bank of Florida, Jacksonville, found that a new product bolstered sales dramatically, according to spokesman Ken Darby. The company's Prime Equity Line bases loan size on home equity and offers borrowers the first year at prime rate.

After using both direct mail and print advertising to promote transferring credit balances to the new lower rate loan, First Union managed to increase home equity loan volume 35%.

The company also offers a no-closing-cost option, and checkbook or Visa Gold card access to the equity line. …

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