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Finding Opportunities in a Low-Origination Market

Mortgage IndustryLast year presented a challenging set of market conditions in the mortgage industry. With interest rates rising, strong home price appreciation, and tight housing supply, lenders must be strategic in their approach to responding to these conditions. And ultimately lenders must find ways to thrive going forward.

What's the Right Approach?

It may be tempting for lenders in the current market atmosphere to look at cutting costs in an effort to combat lower revenue. The effect of these cuts often results in a reduced number of loan officers (LOs) and a slashed marketing budget. The danger in this type of approach is that lenders dramatically reduce opportunities to grow their revenue. This  “penny-wise and pound-foolish” approach of making decisions with smaller amounts of money that end up making bad sense for affecting larger amounts of money, makes it all the more difficult to survive current conditions.

Where Real Opportunity Lies

A better approach for lenders looking to thrive in a down market environment is identifying areas where they can increase revenue through judicious spending.

Creating Long-Term Loyalty: One such opportunity lies in the recognition that LOs are a lender's best source for revenue growth. Making cuts in your LO force will, in turn, reduce your ability to increase revenue. A better approach should include a strategic focus on recruiting and retaining top talent. Be known as a company that invests in employees. Grow your LO force and focus on helping them work more efficiently and ultimately have a better quality of life.

Making Smart Technology Investments: The current market conditions also present an opportunity to evaluate the role technology can play in growing your revenue. Technology platforms for digital mortgage give loan officers the ability to access their loan pipeline, order credit, run pricing, view appraisals, and send pre-approval letters from their mobile device—all while syncing in real-time with your loan origination system. This type of technology empowers your loan officers, increases their ability to close faster without sacrificing their nights and weekends. This savings allows them to spend that extra time in the field working new business. A proven digital mortgage platform will reduce turn times, help increase loan application submissions, and lead to more referral business. That’s a real return on your technology investment.

Providing A Better Customer Experience: Finally, there is an opportunity for lenders to improve the borrower experience. Lenders have found success by engaging borrower prospects earlier, removing stress from the loan process, and ultimately getting people into their homes faster. When borrowers can start the application on one channel and seamlessly continue on another you’ve already improved on their experience. Now add to that the customers' ability to securely scan and upload documents using the lender's app from their mobile device. Now you have solved the paper chase and are on track to getting them into their homes sooner. You’re also giving your borrowers a platform that keeps them connected to you and their realtor throughout the loan transaction. Borrowers will value the convenience and transparency this connection offers as they receive status updates and have immediate contact options at their fingertips. You’ve removed a lot of the stress from the approval process and provided a borrower experience that delivers on the digital mortgage promise.

Thrive vs. Survive

In 2019, many of the trends seen in 2018 will more than likely remain the norm. Smart lenders recognize this as an opportunity to grow at a time their competition is shrinking their workforce and slashing budgets. Doubling down on your people and making a smart investment in the right technology is a recipe to thrive while your competition simply seeks to survive.

About Author: Joe Wilson

Joe Wilson is the Chief Sales Officer at SimpleNexus. Since joining the executive team in 2017, Wilson has lead SimpleNexus to become the industry-leading digital mortgage solution used by over 200 mortgage companies and 20,000+ loan officers nationwide. Under Wilson’s leadership, SimpleNexus has tripled its size of clients and the company now serves 15 out of the top 25 retail lenders in the U.S. He is a regular speaker within the mortgage industry and has received several recognitions, including Ellie Mae’s Circle of Excellence award and HousingWire’s Rising Star award.

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