Fidelity First Financial Corporation is a Maryland-based company that offers high loan to value loans to consumers. These loans, which can be in amounts up to 125 percent of the value of a residence, are designed to help consumers emerge from financially pressured situations in which their solvency is threatened. Because these loans are secured by properties which are not worth the combined value of the loans (the loans are typically written as a combination of first and second mortgages), consumers pay a premium in the form of higher interest rates than for conventional loans. However, these loans are often the last resort for consumers who need to reduce their monthly obligations.
Fidelity First has built its success by using a combination of technology and marketing to target its ideal customer. Direct mail and telemarketing are used extensively to cultivate leads which a highly trained sales force then seeks to close. In most cases, consumers are contacted by Fidelity First for the initial interaction rather than the other way around. Fidelity First competes with other mortgage lenders, including traditional financial institutions (banks and savings and loans) as well as companies that specialize in this type of loan.
This research examines the current position of Fidelity First, and considers the marketing strategy and focus that the company has developed to this point.
Analysis of Organizational Structure
Robert Posner, the chief executive officer (CEO) of Fidelity First, is 28 years old and a man who has received much public attention for his entry into the financial world. Prior to starting Fidelity First, he formed a construction company when he was 20 years old, and worked as a loan originator with ICM Mortgage in Connecticut. In 1995, when he started Fidelity First, Posner had three employees; by 1997, the company had grown to more than 200 employees with a total loan volume expected to exceed $225 mill...