At Altair we pride ourselves on the cohesive, friendly, well-oiled and fun team we have built over the years.  We rely on each other’s expertise and at least once per month, one of our employees will conduct a training session over lunch that we cleverly call “Lunch and Learn”.  Each topic is a specialty of the employee doing the presentation.  This month’s topic was an overview on our Model Development process presented by our Vice President of Analytics, David Hunter.  David’s interesting and varied background not only makes him fun to hang out with and talk to it gives him perspective and insight rarely seen in your typical stats type.

David Hunter: Mechanic, Philanthropist and All Around Great Guy.

He has been in a band and cut a record.  He is an avid cyclist and world class mechanic, as well as generous.  Last weekend he checked over 120 kids bikes at a bike rodeo and then made time to help a little boy learn to ride his bike.  He’s been back in the US for 4 months having recently, lived in Lodz Poland for almost 2 years.  And of course, he has a ton of analytics and modeling experience both on the client-side for BellSouth and as a manager with Equifax.

During today’s Lunch and Learn session, David used an example of a recent custom model to explain how to read a gains chart.  The model was developed to predict the likelihood of booking a refinance loan for a large mortgage lender.  The model has predicts book rates that are 2.6 to 4 times higher than the baseline.  A 400% lift!  So, why aren’t mortgage companies across the country knocking down our door asking about our mortgage models?  I don’t know, but they should.  We’ve built shelf models for Prime Refinance, FHA Refinance and Reverse Mortgage as well as twice that many custom in just the last 6 months.

With Wells Fargo and Bank of America pulling out of the reverse mortgage business there is opportunity for smaller players to gain market share. This gain can help in two ways. First, the Reverse Mortgage/HECM market is likely to consolidate further. If you have a great marketing engine for market share gain, this could pay off. Second, is the natural growth of your existing business or the extension of your business into a new product line.

Even though overall endorsements are down, many of the remaining lenders are seeing increased business as they compete for the customers no longer being picked up by the former market leaders. Two things are happening: lenders who formerly only marketed to current clients or affinity prospects are growing their business by moving into the pure prospecting realm, as well as new lenders entering the fray. In either case, to hit the ground running, prospecting is now an even more important component for Reverse Mortgage lenders.

In order to help take advantage of this opportunity, Altair has updated its reverse mortgage model that helps target households likely to respond to an offer for a reverse mortgage. This model was rebuilt using homeowners that opened up new reverse mortgage accounts between January and August of 2011 in order to reflect the most current market conditions. At our standard score cut, the model can more than double the response rate for offers mailed. For more information about this, and other mortgage models from Altair, please contact:

The decision by Wells Fargo to stop offering reverse mortgages was a shock to many in the industry but it doesn’t mean there is little demand for the product according to a statement from the National Reverse Mortgage Lenders Association.