NewDay Financial Quickly Becomes Leading Reverse Mortgage Lender

February 2nd, 2010 | by John Yedinak Published in News, Reverse Mortgage | 20 Comments

Looking at the top reverse mortgage lenders for the US Department of Housing and Urban Developments FY 2010, its hard not to notice a new name listed in the top 10.

NewDay Financial has come out of nowhere, endorsing 394 HECM in its first 6 months in the business, becoming the 7th largest lender in FY 2010.

Based in Fulton, MD, the company is a Ginnie Mae seller/servicer with both forward and reverse mortgage loan officers who originate in 14 states said Bruce Giacoma, Chairman of NewDay Financial in an interview with RMD.

With a team of PHD’s studying market demographic data, NewDay exclusively uses direct mail to market its reverse mortgage business. Consumers receive a four page document detailing the product and includes a Q&A section. “Unlike traditional mortgage business, seniors will read every single word” said Giacoma. “Attention to detail has been very important”.

According to Giacoma, the company has approximately 30 reverse mortgage originators and recently opened a new office in the greater Chicago area.

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The_Critic

Timing is everything but seeing any company with increased originations in October 2009 is truly fascinating. If it is a direct mail approach, is the response a call room center approach? Or do they have salespeople in the field following up in face-to-face meetings with seniors?
NorCal

Google this company, some interesting blog discussions from folks purporting to be former loan originators in the forward loan division
Robert

The formula is easy. Good mail response rates with a high qual ratio=low cost/lead=low cost/funding. The question is what do their mail pieces look like? I'd open a mail piece that looked like a check as well.
flaguy

another important aspect to consider is their burn rate at this point in the business model…..
ReverseGuy

Look at the positive – we have a newer company in our industry, with a new/better business model, that is having some very good success. Good news is always welcome in this industry – especially since some seem have a “doom and gloom” attitude towards it lately.

Congrats, New Day! (and…no, I do not work there)
mcamus

I think that it is fantastic. It will show the nay sayers that their is life after reduced PLF. Apparently they stumbled across a great piece that works in a certain market place. Good Job!
Desio

I checked out the blog discussion after I googled them too. Their BBB is A+ though. I think that says enough about the company for me.
lancejackson

I wonder about their marketing approach given such a dramatic increase in business in this environment. HUD and other guidelines need to be carefully considered, hopefully they are.
The_Critic

Sad to say, those who rise quickly also have a tendency to fall rapidly. There is no secret sauce. Either these guys are doing everything right or…. I doubt if their model is built around the social media.
The_Critic

Lance,

My thoughts also.
The_Critic

Lance,

My thoughts also.
Robert

If Peter Bell doesn't like the piece, he will send the piece to all the states they are licensed in. In my opinion, that will only make the matter worse and give our industry a bigger black eye. Peter-We need POSITIVE press and not anymore negative press!!! Was anyone on that call with Volky Garcia from HUD on 1/12/10? It was very obvious Peter was trying to have Volky comment negatively on the New Day piece and she basically said it had a few problems but was the least offensive piece of them all.
comeondude

Mr. Jackson,

I think it is beyond unfortunate that simply because some company has shown up and is outperforming yours (I assume since I don't know you, maybe you secretly run the Metlife marketing machine, but I doubt it), you make an implication in a public forum that they may be operating in an unethical manner.
lancejackson

You're right, I have no knowledge to base that on, please accept my apology.
comeondude

No worries. We're all guilty of saying something we didn't quite mean at one time or another.
The_Critic

comeondude,

Congratulations on a well worded and reasoned rebuke.

I cannot believe I am challenging your statement, yet I do. May be I am being too confident, but I have seen many marketing campaigns. Why would this campaign succeed where others have failed? May be they are the best ever but then again, it seems some bloggers believe otherwise.

Perhaps they have found “the secret sauce”; perhaps they have not. If they have, I wish them the best. If not, that is another matter. Like Lance, I do not know but unlike Lance, I am certainly skeptical.
The_Critic

Robert,

What makes you think the press will report on the ads of New Day? So what if they were the least offensive of the ones presented to HUD? That is one person's opinion at HUD.

I fully encourage Mr. Peter Bell to act on this piece as he would in any other case. If they need to be reprimanded then let them be reprimanded. Perhaps they will learn from their mistakes and improve. Mr. Peter Bell has a job to do and is doing it; good for him.
Ken_Keranen

Bet they are on the edge! Response rates to direct mail has dwindled down to practically nothing over the past couple of years using a number of companies. Wonder how they found values high enough to make it work when there was a response. Their advertising budget and cost per loan must be pretty high.
jeremy

this place is a boiler room- too many folks going through the doors, they're down to a handful of folks on the reverse side, their marketing barrages look like fake checks with a “federal” look to them- only a matter of time
jeremy

this place is a boiler room- too many folks going through the doors, they’re down to a handful of folks on the reverse side, their marketing barrages look like fake checks with a “federal” look to them- only a matter of time