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Jan. 15, 2008

Mortgage Meltdown: Blame It on NO CRM !

salaway

Mortgage Meltdown: Blame It on NO CRM !

comment count 4 comments | 1213 reads
Posted by Steve Salaway on Jan 15, 2008

An unpublished report revealed that 90% of today’s troubled mortgage originators did not use CRM technology to conduct their business. Ah Ha! That explains it! How could they reach out to their customer base! What customers? How could they deepen those relationships without the tools we all know and love!

Faced with a contact management challenged situation, the only choice of mortgage originators was to package those loans and sell them off to some innocent wholesaler who hopefully had a CRM system. Now you know the real cause of the sub prime mortgage crisis. It was not the corporate mantra of growth at all costs, nor was it that sneaky little practice of yield spread premium fees between banker and broker ... it was not having a CRM system in the first place.

So the next time your CEO asks what he is getting for his CRM investment, just keep a running tally of the billions of dollars lost on the downside. Of course this is for the contact management feature only. Imagine if you factored in pipeline analysis, campaign marketing … well you get the picture!

Note, this does not replace the great advice from Scott Santucci, BluePrint Marketing, in a previous blog that addresses real issues.

Steve Salaway
S.P.Salaway & Associates LLC



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Steve Salaway
Steve Salaway is principal of S.P.Salaway & Associates LLC, a CRM consulting firm that specializes in enabling technologies for marketing, sales and customer service. Salaway has a bachelor of arts in economics and a master of science in applied statistics from Rutgers, the State University. Email him at salaway@earthlink.net or visit www.salaway.net.
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4 comments »
graham_hill

graham_hill

Jan 19, 2008 - 10:23

More Chalk & Cheese

Steve

I think I spot the Halo Effect in action.

From the dozens of articles in finance journals that I have read, the sub-prime problems we are all experiencing seems to be nothing to do with CRM at all. Rather, they seem to be the result of two different factors. First, miss-selling to customers who patently couldn't afford the loans they took out. And second, financial engineering that laid-off risk to a globalised financial market that couldn't follow the risk they bought. The rest as they say, is history.

CRM isn't going to help you overcome the costly combination of stupidity, greed and ignorance on a global scale. That requires something entirely different.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Readability Index: 12

salaway

salaway

Jan 20, 2008 - 13:57

Mortgage Meltdown: Blame it on NO CRM!

Don't disagree! I was being facetious in my remarks. Better keep my day job!
Steve Salaway

graham_hill

graham_hill

Jan 20, 2008 - 17:09

Maybe There is a CRM Angle

Steve

I did wonder. But I had to go on what was there rather than what was between the lines.

Maybe there is a CRM angle though. I have blogged before about the importance of customer fairness. This also includes not selling stuff that customers obviously cannot afford, either at the point of sale, or later when all sorts of additional hidden charges kick-in. It is this sort of egregious miss-selling that has driven the UK Government Financial Services Authority (FSA), that regulates retail financial services, to introduce Treating Customers Fairly (TCF) legislation. The onus is now on financial services companies to prove that they meet six tough outcomes for fairness if they are to avoid being hauled over the regulatory coals by the FSA. Caveat venditor.

This is a great CRM story. One that is long overdue. It would make a good follow-on post for you to write about after your initial one. How about you writing it?

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Readability Index: 10

salaway

salaway

Jan 22, 2008 - 17:49

Mortgage Meltdown: Blame It on NO CRM !

Thank you for your encouragement! Customer Relationship Management(CRM)whose foundation must be Customer Fairness Management(CFM)is a topic I intend to pursue!
Steve Salaway
S.P.Salaway & Associaes LLC

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