LEADCRITICWelcome to the Club, iLeadExchange
If you are keeping tabs on the amount of lead exchanges coming to market you will need to add one more to the list. You also want to keep an eye out for two other exchanges that are coming to market in the next 6 to 8 months. iLeadExchange was launched recently and promises to produce the ever elusive ROI. Yes, I said promises, as in guarantees.
Here is the skinny, based on their website. The buyer pays $995 for 5 closed loans. The exchange will literally exchange each lead that does not end in a closed loan with a fresh lead until the buyer closes 5 loans resulting in an estimated $199 CPF. This sounds like a pretty good deal right?
iLeadx Mortgage Lead Service is the first and only mortgage lead sales company that will guaranteed you a return on your investment. We guarantee our leads will close. Sound to good to be true? It’s Not! iLeadx (iLeadExchange.com) has positioned and aligned itself with dozens of mortgage lead marketing firms that offer top notch mortgage leads at such an affordable price, we can guarantee your success.
So what is the catch? I don’t know if there is one, but here are the things that I would consider. First, to be able to exchange leads until they fund and minimize the risk as much as possible they will have to find the best marketing and at the absolute lowest cost and this can be difficult. It is easy to produce cheap leads, but cheap leads that convert can be challenging. My guess is that it is also much easier to sleep at night when the their is reduced marketing cost outstanding and I am guessing that is the route they took, to produce cheap leads first. According to their Media Kit the leads are “Fresh Leads (24 Hours Or Less)” I take that as though the leads are not necessarily sent in real time, rather the leads probably have been sold and are now being sold possibly hours or minutes after they have already been distributed to other buyers. Meaning they are selling aged left over data. This may or may not be a very big deal based on the cost structure.
They also say that “80% of Leads contain Email Addresses” which opens the door to speculate that some of the leads may be trigger data. Just a guess, though, however I do know that most all reputable mortgage forms require email addresses.
So lets say that not all the leads are sent in real time and the there may be trigger data mixed in. What does this mean? Is it still a good deal? I think there is a chance it is a good deal based on the fact that you continue to receive leads until you close them. The down side is that you may spend a large amount time dialing questionable data. What is your time worth? Could that time be monetized better with higher priced leads?
iLeadexchange puts a different spin in the term Lead Exchange. What do you think about it?
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LeadRabbi | Jul 28, 2008 | Reply
$995 for 5 loans - looks like a section 8 violation to me. A reminder to folks that don’t like to play by the rules, the anti-kickback prohibition in RESPA is the only mortgage-specific federal regulation that carries criminal penalties up to and including a brief spiritual retreat in a federal prison.
Maybe Drew can comment about the use of his brand name (iLeads) to give legitimacy to the exchange (iLeadExchange). I can’t find any connection between the companies on either’s website or in a whois search.
LeadRabbi’s verdict - NOT KOSHER
A Lead Buyer | Jul 29, 2008 | Reply
What’s the violation? LendingTree has been charging for closed loans forever…
Mike E | Jul 29, 2008 | Reply
If it is an exchange and they are only charging by funded loan, how are the marketers getting paid? Who is generating their leads? If the marketers aren’t getting paid top dollar to generate great quality leads, they walk over to another exchange and the exchange is stuck with average/poor marketers delivering average/poor quality leads that can’t hit a $199 CPF.
My bet is that their pricing model will change very quickly.
LeadRabbi | Jul 29, 2008 | Reply
LendingTree would qualify under either the Broker exemption or the CLO exemption. As an exchange is not performing the activities of a broker or a CLO, they would not be exempt from section 8.
A lead buyer | Jul 29, 2008 | Reply
fair point…hadn’t really thought about that.
Raj Parekh | Jul 29, 2008 | Reply
Who is behind this company? That will tell us all a lot. Does anyone know?
bridge over tumultous waters | Jul 29, 2008 | Reply
iRabbi (great screen name by the way) is 100pct correct. Its a RESPA violation.
Curious, what’s to stop a lender from taking every lead and only calling 1 in 100 that are cherry-picked? If you called 1 in 100 and closed 10pct, that’s $199 fee for 1000 leads - $0.20 per lead. Doesn’t sound like a great business model to me, beyond dumping leads nobody wants anyway
Noel Collins | Jul 29, 2008 | Reply
Did you check out the press kit? lol
Lead Critic | Jul 29, 2008 | Reply
haha, I love the readers of this blog! I guess we also have determine the attorney costs associated with breaking RESPA laws when vetting this strategy.
Noel Collins | Jul 29, 2008 | Reply
LC you identified the new company, can you offer the readers any insight or direction on how to obtain more information about this firm?
I’m sure some of us are interested in engaging beyond the commentary observed today. Is this legitimate? Can they offer a method to side step RESPA? Who are the customers currently, etc.
Let’s move the discussion to the next level, are they LEGIT?
Thanks LC….
Raj Parekh | Jul 29, 2008 | Reply
I just got off the phone with them. They seem to be generating leads using a number of different marketing methodologies including email marketing. The guy I spoke to was very nice and has been in the lead and data development business for a few years and seemed to know what he was talking about. I of course called them to see if we can integrate with them.
I believe the CEO or at least one of the founders is a gentleman named Justin Davis, who was a former mortgage broker from California that sold his company and moved out east to develop this venture with a partner.
The guy I spoke to said that they realize that they are in a grey area of RESPA, but they have raised the issue with their attorneys and do not believe that they are in any way violating any regulations. They are pure lead providers and the Exchange in their name is not indicative of them being an exchange. They have plans for an exchange like platform in the future, but are not quite there yet.
That’s all the information I have about them. We will be integrating with them in the near future so if you’re a buyer of theirs, you will be able to manage the leads you purchase from them via LeadROI.
William Clay | Jul 29, 2008 | Reply
Hello everyone, I spoke with a couple of you today I believe, and am glad to see some chatter on the forums and comment sections of a few sites. ileadexchange.com welcomes any calls from LO’s and brokers who would like to learn more about us. We are oen of the lead companies that you will see make solid progress in the industry and we will keep a trusted name. We are dedicated to quality service and honest service. As for RESPA, I am not an attorney myself nor am I qualified to speak on the issue. We do charge a per lead fee up front and we simply guarantee results or you get a replacement lead. We are not taking any kickbacks from the loan fees from you. It is simply a per lead fee with a guarantee. Grey??
Anyway, pleaes call us and chat if you would like.
Also we generate leads in-house and do send them in real-time, and we do not use trigger data at all for mortgage leads. Our system is designed to make money for us and licensed LO’s / lead buyers. We have the math figured out, and the system is going good so far for our clients.
Raj - Good talking to you today!
Everyone have a great week.
William Clay
BootyJuice | Jul 29, 2008 | Reply
I noticed a certain post was removed. Hmm.
Something for everyone who reads this to note : you’re playing in Google’s back yard. I predict great consolidation in the lead gen industry in the next few years, so much so, in fact, that there won’t be a lead gen industry and this will be considered part of the core business that Google, Yahoo, IAC, Oracle, and Microsoft call part of their Enterprise offerings.
Raj Parekh | Jul 29, 2008 | Reply
Wow Noel. I don’t even understand your post. I just called iLeadExchange and spoke to William and then posted about it. When I called William, he asked me why I was calling. I told him I was with a LeadROI and wanted to know more about the company. I also told him that I heard about him from the LeadCritic post today, which he was unaware of. I’m not promoting or being critical of anyone. I just was reporting back to this forum regarding my conversation. After speaking with William, I felt like he was a good guy and I told him that I would send him our integration specs so they can recommend our lead management system to their clients. I don’t see what is so wrong or sinister about that. I asked him about a potential RESPA violation and he gave me a very straight answer, which I simply reported about. I don’t even know who these guys are but I go to NYC often so I told William that I would love to meet with him and the rest of their team the next time I’m there.
I don’t even really get your post to tell you the truth. Of course I promote LeadROI, it’s my job. I’m not promoting ileadsexchange. I’m just informing buyers of their leads that our system can manage their leads. I said nothing about the quality of their leads as I cannot know that until we have some data on them. Like I said, I have no idea who they are. I just proactively called them and talked to the guy who answered the phone.
I don’t know what Jay Dunsing has to do with this. I only commented on Jay’s post because it seemed odd that the text of his post was also the text of the testimonial on the L360 site. If you read my post to him again, I said if you don’t know who I am that tells me that you haven’t evaluated the other systems out there. If you are or were considering LeadROI in the past 4 years, it’s a safe bet you have talked to me, and since Jay didn’t know who I was, it is a safe bet that he didn’t consider LeadROI. That’s all I was trying to say in that post. Jay responded with a very reasonable post that cleared his intent.
I think you should re-read the posts. You sound incredibly disgruntled about something and I can’t imagine it was the fact that I cold called a new lead provider and got some information about them that I shared with the patrons of this blog. Strange.
Raj Parekh | Jul 29, 2008 | Reply
Bootyjuice…
Agreed…
Noel Collins | Jul 29, 2008 | Reply
Raj, more and more you are desperate to attack and offer relevance to the industry. But your contradictory comments today versus what you just said to Jay Dunsing a day or two ago doesn’t sit well with this insider.
A few days ago, you attacked Jay Dunsing for mentioning a competing lead management system.
There is dispute on what Jay’s actual numbers are, and it seems some don’t believe his too true to be numbers but you claimed his post was nothing more than a Leads360 solicitation and to disregard his comments. (BTW 360 eliminated my position and I do NOT work for them or have any loyalty to the company).
You even commented that Jay didn’t remember or know who you were and that was a reason to discount his positive reflection of the product.
I personally found it funny that one of the most (Sorry Jay), obnoxious (Savvy) buyers in the industry did not even remember who you were. Raj anyone who sells leads knows who Jay Dunsing is; it should not hurt your feelings that he does not remember you.
I guess my point is our group of lead buyers/sellers/advertisers/insiders does not take lightly to you claiming in the previous posts to be a neutral party when your new comments are reflective of the opposite.
Anyone could easily say your current comments and promotio is nothing more than a LeadROI solicitation, and a solicitation for an unproven and pretty nondescript product. OUCH
You spoke with the company and seem to be promoting it, but have you seen the landing page and clicked on all the links and followed up with legal? You mentioned you were reaching out to them for integration purposes in the near future,.
What does that say to us insiders holding you accountable for commentary and opinion that LeadROI/Media Whiz held a call with someone who did not eel confident to utter the statement “As for RESPA, I am not an attorney myself nor am I qualified to speak on the issue”.
Raj, you should be in politics, Wow. How about saying “Senator I do not recollect, it was not sex”.
Do you really think anyone in this forum or anyone who will reflect back on this post respects your distractions Raj?
Noel Collins | Jul 29, 2008 | Reply
Raj, I will let you noodle on your own commentary in some recent posts versus your commentary on this post. Sounds to this insider who used your product that you are doing the same thing you complained about a day or two ago. If you have objections to someone like me calling you on it, tough. This particular company does not offer much in the way of “Warm and Fuzzies”, but you seem to have that feeling already. Your comments sound like the endorsement, can we not call you on your own BS as it comes through the door? Or do you like your conversations to be one sided, opinion and nothing more???
Raj Parekh | Jul 29, 2008 | Reply
I will reiterate. I am not promoting ileadexchange. I don’t even know who they are. I was simply reporting my findings. I asked in an earlier post if anyone knew who was behind the company. I did the digging myself and posted my findings. If you’re reading anything else into that post you’re simply mistaken.
Noel Collins | Jul 29, 2008 | Reply
Fair enough, I promise to not offer my URL to my website and rush out to integrate with an unproven nondescript firm. I promise to always evangelize the benefits of working with a solid, reputable firm that takes the consumers interest at heart, regardless of my “Critics”.
Raj Parekh | Jul 29, 2008 | Reply
Lead providers have their own sales people. They don’t need LeadROI, Lead360, LeadMailbox, or Kaleidico to sell their leads. They need the us to ensure that their leads are delivered to the right sales person in a timely manner and that the leads can be tracked through the entire sales lifecycle. We occasionally assist our clients in contacting the people we know at the different lead providers we have worked with, but ultimately we leave the promoting of the lead source to the sales people that are trained to do that and have deeper knowledge of their own generation practices. If our clients aren’t performing well with a certain provider’s leads, our job it to help our clients analyze what production factors are influencing conversions and which lead sources aren’t performing well for them. It’s really that simple. Over the years, we have integrated with so many lead providers, some of which are still in business, and others who are no longer around.That’s just the nature of the beast. Our clients would call us and say, “I’m buying from XYZ provider, can you integrate with them?” and we say yes. We created the SMLT (Secure Mortgage Lead Transfer) XML spec for that reason. We simply send our documentation to the lead provider and within days the integration is completed. That’s it really, and that’s all this is. Whether anyone buys from iLeadExchange is up to their own sales efforts, but when someone does buy from them, I want to make sure that we have completed the integration leg work. By the way, when I talked to William he said, “We’re going to integrate with Leads360 and the others.” I said have you heard of LeadROI and he replied “yes”. No BS Noel, just 2 regular people having a regular conversation.
Your post is so conspiracy theory that I’m forever going to call you ” The Grassy Noel”
Noel Collins | Jul 30, 2008 | Reply
LOL
Lead Critic | Jul 30, 2008 | Reply
Booty,
Are you talking about a comment or post?
A comment was removed by the request of the person who wrote it. Not sure if there is much to ponder there.
Regarding your prediction, I think that is too obvious. Yes, there will be consolidation, will lead-gen be swallowed up by Google, Yahoo or Micrsoft? I am not convinced. Definitely not going to happen by the IAC or Oracle.
We shall see ,though
leadgen101 | Jul 30, 2008 | Reply
They should get someone proofread their homepage!
“iLeadx Mortgage Lead Service is the first and only mortgage lead sales company that will guaranteed you a return on your investment.”
Here is a note from my compliance attorney on possible violations.
Well, it’s certainly creative – though a little too transparent. A better approach would be to have a fixed marketing fee that caps out based on performance (which ends up being equivalent to a closed loan fee). The issue is not so much licensing as RESPA. State laws and federal laws do not interact well when it comes to lead generation. The aggressive states say that you are a broker simply for collecting any data from a potential mortgage customer. The economics of the relationship do not matter. It’s just the data collection that trips the wire in their world.
The feds, on the other hand, do not deal with licensing. They do deal with economics and they say that a lender cannot pay a service provider a closed loan fee unless that company is a mortgage broker. They have a test for determining who qualifies as a mortgage broker and this test says that you are NOT a broker unless you do undertake five mortgage-like functions (application taking only counting as one).
So in a nutshell, the states say that the lead generator is a broker and must get a license and the feds say that he is not a broker and cannot be paid for a closed loan. Hence the lead fee.
This company will find that a lot of lenders will be unwilling to pay them on this basis because it’s obviously a closed loan fee. As a lender, I’d be more comfortable with purchasing leads from an unlicensed company than entering into a contract that is clearly a RESPA violation. In fact, even if a lender goes along with the concept that it’s a lead fee, a $995 lead fee would be considered unreasonable and would still violate RESPA.
Having said all that, I think that online lead generation is marketing, not brokering, and that these types of compensation arrangements should be legal.
Drew Warmington | Jul 30, 2008 | Reply
I’m not going to comment on their business model, but I can comment on their use of trademarked names. iLeads.com, owns trademarks granted in 2001 to both “iLeads” as well as “Leadexchange”.
Since their use is confusingly similar to our marks, our trademark attorney feels (as I do) that we have a strong case infringement, and as such a C&D letter is going out.
To be clear, iLeads.com (nor First American Financial) have anything to do with this site.
Bootyjuice | Jul 30, 2008 | Reply
IAC definitely, they are already in this game, and one of the largest… I think its foolish to write them off. Oracle you just can’t be too sure about, its on the small side but they are wading into e-Discovery and I see potential for offering some built-in analytics tools that bolt onto your Enterprise CRM. That’s a little more iffy though.
Microsoft, Google, and Yahoo already have initiatives and are definitely at the party.
I still see room for a dark horse making an impact, and certainly a lucky (hardworking) few of you will be acquired by the majors.
There are also companies like Ingenio who are in line and looking to the majors for acquisition too, and some may be healthy enough to survive on their own.
Bootyjuice | Jul 30, 2008 | Reply
Whoops, looks like Ingenio just WAS acquired by ATT. See, there you go, telcos are getting into the game. Expect to see this area as perhaps one edge where Google and the telcos really battle.
Lead Critic | Jul 30, 2008 | Reply
Thats a good play for ATT
LeadSnob | Jul 30, 2008 | Reply
These guys are in NYC…is this Root with a different skin?
bridge over tumultous waters | Jul 30, 2008 | Reply
IAC is spinning off their lead gen operation of tree.com in a few weeks. They do not want it anymore. They are keeping servicemagic as part of citysearch though
Noel Collins | Jul 30, 2008 | Reply
makes sense, that is what Experian should do in IMO.
Bootyjuice | Jul 30, 2008 | Reply
The telcos are gearing up for battle with Google in time for the Android launch. 1-800-GOOG-411 was a shot across the bow, you can’t expect telcos to take that lying down.
mh040734 | Aug 2, 2008 | Reply
Very interesting post and comments! I am also curious to see how this new concept works out for a lead exchange.