Clint Engel
\nLeader focus on marketing effort<\/p>\n
HIGH POINT– Some of the industry’s largest furniture retailers and representatives of six financial institutions met here Tuesday for breakfast and a back-and-forth on what it will take to make furniture purchases a part of home mortgages.<\/p>\n
<\/p>\n
While there clearly are hurdles to pursuing the idea of a \u00e2\u20ac\u0153furniture upgrade option\u00e2\u20ac\u009d attached to first mortgages, lenders and retailers agreed that it\u00e2\u20ac\u2122s largely marketing that\u00e2\u20ac\u2122s needed to begin tying furniture purchases to second mortgages or home equity lines.
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The money and credit lines already are out there, one lender said, noting one-quarter to one-third of all mortgage customers take out home equity lines, and many go unused until it\u00e2\u20ac\u2122s time to buy a car or other big-ticket item.<\/p>\n
The industry needs to present consumers with a unified message and a focused plan in order to get their share of those dollars, the group said.<\/p>\n
With billions of dollars potentially at stake, the meeting, hosted by Furniture|Today and moderated by Editor in Chief Ray Allegrezza, drew Top 100 retailers such as R.C. Willey\u00e2\u20ac\u2122s Jeff Child, Havertys\u00e2\u20ac\u2122 Clarence Smith, Wickes\u00e2\u20ac\u2122 John Disa, Rooms To Go\u00e2\u20ac\u2122s Peter Weitzner, Ashley\u00e2\u20ac\u2122s Ron and Todd Wanek, JCPenney\u00e2\u20ac\u2122s Bob Price, Furnitureland South\u00e2\u20ac\u2122s Jason and Darrell Harris, and City Furniture President Keith Koenig, who got the ball rolling on the idea earlier this year.<\/p>\n
The financial institutions represented were Citi Financial, Wachovia, Wells Fargo Financial, GE Retail Sales Financial, American General Financial and American Dream Residential.<\/p>\n
If every one of some 8.3 million U.S. homebuyers last year purchased $10,000 in new furniture at the time they bought homes, that would mean $83 billion in furniture sales, Koenig said, admitting that is a blue-sky scenario.<\/p>\n
Still, the potential is enormous, he said.<\/p>\n
Among the options discussed, and the one with the most immediate potential, was the tying of furniture sales to home equity lines. Dan Abbott, president of Wells Fargo Financial Retail Services, said his firm already is developing marketing materials that would connect home equity lines and furniture in the consumer\u00e2\u20ac\u2122s mind.<\/p>\n
Koenig said it\u00e2\u20ac\u2122s important that marketing efforts include a wide choice of retailers. For example, he\u00e2\u20ac\u2122d want any marketing materials highlighting everyone from City Furniture and Ashley Furniture HomeStores to South Florida competitors Rooms To Go, Carls and Baer\u00e2\u20ac\u2122s.<\/p>\n
Another opportunity lies with homebuilders, said Toby Roberts, national markets builder sales manager for Wells Fargo Home Mortgage. The housing market is soft right now, he said, and \u00e2\u20ac\u0153they\u00e2\u20ac\u2122re looking for opportunities to sell other products.\u00e2\u20ac\u009d<\/p>\n
There was resistance on the part of lenders to the idea of first-mortgage furniture upgrades.<\/p>\n
\u00e2\u20ac\u0153You\u00e2\u20ac\u2122re going to have to go a different path,\u00e2\u20ac\u009d said Steve House, senior vice president of Wachovia\u00e2\u20ac\u2122s retail division. Most conventional mortgages are bundled and resold to companies such Fannie Mae and Freddie Mac, which were not represented at the meeting and would have problems with adding movable furniture to mortgages, the group agreed.<\/p>\n
Among other things, that would require another appraisal before the loan is approved, House said.<\/p>\n
Kelly Brown, vice president and regional sales manager of CitiMortgage, suggested the lenders together approach Fannie Mae and Freddie Mac to show their support for the idea. Kevin Castellani, vice president and publishing director for Furniture|Today and one of the meeting\u00e2\u20ac\u2122s organizers, said he has contacted both agencies and that Freddie Mac has agreed to meet with the lenders and the furniture industry to discuss options.<\/p>\n
Another lender, Andrew May of American Dream Residential, said later that it would take years to get those agencies to move on something like this.<\/p>\n
Despite these obstacles, several retailers were particularly interested in the first-mortgage route, noting that while second-mortgage opportunities existed, the big breakthrough would be with first mortgages.<\/p>\n
\u00e2\u20ac\u0153I think we need to do everything we can to get it tied to a first mortgage,\u00e2\u20ac\u009d said Havertys President and CEO Clarence Smith, adding he was excited by the possibility of a concerted effort by lenders with Fannie Mae and Freddie Mac.<\/p>\n
Koenig said he realized the first-mortgage scenario will take work, but the industry needs to hammer away just as the broadloom carpeting industry did years ago to get their product in homes, then in mortgages.<\/p>\n
The next steps for City include creating point-of-sale materials that list mortgage lenders \u00e2\u20ac\u0153that want to partner with us.\u00e2\u20ac\u009d Koenig said he\u00e2\u20ac\u2122s also looking into advertising in local newspaper real estate sections, and is calling on competitors to work with him, perhaps on group advertising, to create consumer awareness.<\/p>\n
\u00e2\u20ac\u0153We\u00e2\u20ac\u2122re willing to spend some serious money to create awareness in South Florida that if you\u00e2\u20ac\u2122re buying a home, you can (put) furniture on your mortgage,\u00e2\u20ac\u009d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Clint Engel Leader focus on marketing effort HIGH POINT– Some of the industry’s largest furniture retailers and representatives of six financial institutions met here Tuesday for breakfast and a back-and-forth on what it will take to make furniture purchases a part of home mortgages. While there clearly are hurdles to pursuing the idea of a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-555","post","type-post","status-publish","format-standard","hentry","category-furniture-world-news"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts\/555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/comments?post=555"}],"version-history":[{"count":0,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts\/555\/revisions"}],"wp:attachment":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/media?parent=555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/categories?post=555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/tags?post=555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}