Magazine article Mortgage Banking

Selling Gold: Freddie Mac Built a Glitzy Marketing Campaign around the Theme of Gold

Magazine article Mortgage Banking

Selling Gold: Freddie Mac Built a Glitzy Marketing Campaign around the Theme of Gold

Article excerpt

SELLING GOLD

Throughout history, the values of many currencies have been measured against gold - the most sought after of precious metals. We refer to a once-in-a-lifetime chance as a "golden opportunity." We say that effective employees or trusty, reliable friends are "worth their weight in gold."

Freddie Mac wanted to evoke these coveted qualities when it chose the name for its Gold Mortgage Participation Certificates (PCs) and the Gold Cash Program. In creating the marketing themes, Freddie Mac's goal was to identify these programs with something that represented long-lasting, time-tested value. We wanted to convey what we believed the market could expect once issuance of the enhanced PCs and new cash window procedures began in October. Freddie Mac wanted a name easy to remember and one that expressed superlative quality. The word "gold" seemed to convey just the right meaning.

The uniqueness of the change in our programs required that the corporation make an unprecedented promotional launch campaign. Gold PCs, which are issued under Freddie Mac's Guarantor Program and formed from the corporation's cash pools, feature the fastest pass-through of any conventional, agency-issued mortgage security. Freddie Mac's improved cash program will offer customers an easier way to get closer-to-the-market prices for their mortgages. Pulling out all the stops in marketing meant greater depth and breadth of communication with our seller/services, investors, dealers, staff and the media than we had ever employed before.

The major responsibility for developing, marketing and implementing the Gold program rested with the corporate project team, made up of representatives from many departments: finance, operations, marketing and sales, communications and legal. The members met often to plan and map out strategies on all aspects of the project.

Last February, the team began concentrating heavily on actual marketing and decided to support the Gold enhancements through a full range of activities and materials. Those activities and materials included the following categories:

Technical information

* Sellers' and Servicers' Guide

bulletins * Offering circular supplements * A feature article in Freddie

Mac Reports, the corporation's

industry publication

covering the secondary mortgage

market * Investor fact sheets

Promotion and media

* Advertising * A promotional packet featuring four-color

brochures * Media event (announcement)

Educational and special

* Extensive dealer, investor and seller/servicer

briefings * Electronic, Gold-related messages

relayed to seller/servicers via MIDANET,

Freddie Mac's automated

mortgage delivery and accounting

reporting system * Discussions of Gold enchancements

at industry meetings and conventions * A "hotline" for customer questions

Internal

* Thorough internal training for Freddie

Mac's sales force * Information and events designed to

promote staff knowledge and enthusiasm

about the programs

The enhancements

For all the conceptual and operational complexity behind bringing more sophisticated programs to market, our group's task was to inform audiences about the respective features and benefits of value to them. To do this, we needed to boil down lots of information into accessible, concise communications.

Basic changes to our PC - a security that had been serving investor needs for several years - meant even greater efficiency of mortgage securitization. Under the Gold programs, payments would be passed through to investors even sooner. The securities would come with guarantees of timely payment of both interest and principal. Prepayment speed calculations would be based on actual prepayments received, instead of on predictions. …

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