Effective marketing often relies on competitive analysis and consumer research to help identify unmet needs and craft targeted strategies. For Chief Marketing Officers in mortgage, publicly available public data compiled through the Home Mortgage Disclosure Act (HMDA) and U.S. Census Bureau can provide a powerful launch point for developing a deeper understanding of their markets and competitors.

Under HMDA, financial institutions are required to provide regulators with data about their mortgage applications and loan originations, as well as purchases of home loans, home improvement loans, and refinancings. Data collected includes variables such as applicant demographics, loan type, property location and type.

Unlocking the value of HMDA data

Forward-thinking mortgage lenders are using HMDA information to identify causes of market-share variance, determine the best product for each market, and gain insight into their competitors’ growth strategies.

How can financial institutions best take advantage of this data? In a Scotsman Guide article, Beyond the Arc CEO Steven Ramirez shared how banks can use HMDA data to:

  • Determine the best product for each market segment
  • Gain insight into the competition’s growth strategies
  • Identify causes of market-share variance

Suppose you want to target a specific region with the most relevant lending offers. By analyzing zipcode data and loan type, you can identify the types of financing consumers in a given area have applied for most frequently. You can then develop a strategy to gain a competitive edge, such as promoting a certain type of loan or emphasizing federal home loan programs to attract more first-time homebuyers.

Gain a comprehensive view with Census data

Census data is also publicly available, and includes income, education, and household size, as well as financial details about the residence (e.g., home value, average cost of utilities, real estate taxes) and physical characteristics of housing in a given area (e.g., year built, number of bedrooms, year the owner moved in). Banks can leverage Census data to complement findings from HMDA data to enrich their understanding of the communities they serve.

As an example: Using both HMDA and Census data, you may discover that a competing lender in one of your markets is originating a large number of loans with first-time buyers who are purchasing homes more than 30 years old. Once you’ve identified this trend, you can reassess your strategy in this market. Will you try to compete with the other lender for first-time homebuyers or can you capitalize on a likely need – such as home-equity lines of credit to finance home improvements?

Together, HMDA and Census data paint a more complete picture of your markets to help you identify unmet needs, as well as sources of market-share variance.

Expand your potential with additional public data sources

HMDA and Census data only tell part of the customer story, however. To gain a deeper understanding of the patterns revealed in that data, financial institutions should look at other sources of market data such as the Consumer Financial Protection Bureau complaint database, and customer feedback in social media. These publicly available resources are easy to use — it’s just a matter of asking the right questions to glean useful insights from the data, and then taking action based on those insights. Ask yourself: What’s the problem I’m trying to solve? Armed with data, you can reach a fact-based conclusion that will help you put a plan into action.