In spite of the lingering recession and ongoing foreclosures across the country, many homeowners are still making plans to remodel all or part of their home.  In fact, the home across the street from me is undergoing a major remodeling job while the house down the street is crawling with workers doing a complete landscaping job on the front yard.  With many contractors looking for work, most have reduced their prices for remodeling and landscaping work.

Over the past several months we’ve seen a major uptick in new and used car sales.  And with high gas prices we’re seeing a jump in used car sales – especially for cars getting high gas mileage.  As gas prices continue to escalate, we can expect a lot more churn in the car and truck market.

And if you’ve been reading the paper lately or listening to the radio you know that record numbers of high school graduates are trying to get into college.  In fact, many colleges and universities are reporting record numbers of applicants.  At the same time, the cost for college is skyrocketing.

And with millions of people out of work for an extended period of time, many have given up finding a job working for someone else and are striking out on their own – they’re going into business for themselves.

So what do all four of these scenarios have in common?

In every situation there is a need for large sums of money to make it happen – one immediately and the other three over time.

So, the question is this:  When these folks walk into the lobby of one of your branches seeking an equity loan or line of credit, will you be ready for them?  Should they visit your website will they be greeted with a banner ad for an equity line or loan?  Have your branch employees been trained to probe for the need and cross-sell your HELOC product?

Earlier this year a few financial institutions were busy tightening their underwriting guidelines and lining up their appraisers.  With historically low borrowing costs providing decent margins, there’s money to be made in the equity line and loan business. Already, banks and credit unions in some parts of the country have dusted off their equity line and loan marketing plans and started implementing them.

While there’s absolutely no equity lending marketing in the Sacramento market, it’s a totally different story in ACTON Marketing’s hometown of Lincoln, Nebraska.

In just 11 days between April 1 and April 11, the Lincoln Journal Star carried nine equity line newspaper ads from six different banks and credit unions.  This suggests a marketing skirmish has already started in this Midwest market.

Traditionally, most banks and credit unions use newspaper ads to promote their equity lines and loans.  But this isn’t the most cost-effective marketing channel for this product.  How many of the newspaper readers live in apartments or rental homes or have little or no equity in their homes?

The most cost-effective approach to marketing your equity lines and loans is targeted, personalized direct mail only to homeowners with sufficient equity to qualify for a line or loan.  This requires using a direct response marketing agency with experience in consumer lending products, statistical modeling for prospect identification, database management, and sales training for your employees.  While this might seem more costly than a few simple newspaper ads, the number that ultimately counts is the cost per new equity line and loan customer.

If you aren’t already working on your HELOC marketing strategy for 2011, there’s still time to get started.  It’s always better to be in front of the curve than playing catch-up later on.

Home equity lines and loans are back!