Getting an Earful

Thursday, February 01, 2007

Two focus groups with industry partners conducted by HUD Richmond's Virginia Holman and David Dwyer might suggest that FHA may need to re-focus its marketing and outreach efforts.

The first group in September with members of the Williamsburg Area Association of REALTORS and the second in November with the Roanoke chapter of the Virginia Association of Mortgage Brokers were convened, explains Holman, "to find out what's working and what's not with FHA mortgage insurance products."

"We got an earful," she adds, "but not what we expected." Generally, she reports, REALTORS and lenders were pleased with the product and "with the market slow-down and the rush out of sub-prime mortgages, FHA has become a much more attractive product."

What Dwyer and Holman didn't expect, though, were comments made by both groups about which has been keeping closest track of what's new at the "new FHA." They had expected that , because of their close working relationships with potential buyers, REALTORS would be most interested in the changes at FHA. "The exact opposite," Holman adds, "was true. Almost to a person, both groups told us that lenders - not REALTORS - are the ones most focused on which products best fit which buyers for which homes. REALTORS, like buyers, look to lenders to tell them which product - FHA or non-FHA - best fits their circumstances and needs."

"Although our sample is pretty small," Dwyer observes, "what we heard could have rather profound implications for our marketing approach. For the past couple of years HUD Richmond has been aggressively marketing FHA to REALTORS. But if, as these groups suggest,, it is the lender and not the REALTOR driving the product selection, we may need to shift our marketing and outreach focus. Certainly, we need to explore this issue further and look forward to speaking with other groups in an attempt to confirm this point of view."

Over the last two years, HUD Richmond also has conducted focus groups with faith- and community organizations, managers and owners of HUD-assisted properties and public housing authorities. "HUD has a host of market-sensitive products and programs," explains Field Office Director Bill Miles. "Focus groups are a good way to get a better idea of what's working and what's not once they hit the market."

HUD Richmond, Miles adds, is planning additional focus groups later this fiscal year to determine whether the comments they've already heard about FHA products reflect market-wide or market-specific trends in Virginia.


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