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A Survival Guide for Today’s Mortgage Market

LenderThe mortgage industry currently operates in an environment of rising rates, narrowing margins, reduced volumes, and tough competition. The refinance boom is in the rearview mirror, and mortgage companies are now focused on building up their purchase business and making it the centerpiece of their revenue model for the next several years. But what’s the secret to doing more than just hunkering down and surviving the challenges?

Get back to the basics

There is simply no substitute for fundamental concepts like anticipating the customers’ needs (think of the waiter that refills your water without asking) and using all available tools to improve efficiencies. By utilizing new technologies throughout the loan cycle, we not only keep our cost per loan down but can provide a better customer experience that extends well beyond the close of the loan. Instituting workflow improvements allows us to reduce cycle time from application to closing – to be more rate-competitive in the market.

However, we’ve found that technology and efficiencies can only take us so far. Customer commitment means expending the resources and human capital to personally guide borrowers, particularly first-time homebuyers. Technology is fantastic, but it can’t necessarily calm the concerns of a would-be borrower. Apps and APIs can’t feel and take part in the emotional process of taking on a mortgage loan and purchasing a home.

As a retention-focused operation, lenders must look at processes at the micro level and find every opportunity to cultivate the borrower relationship in the origination stage and then “handshake” that relationship back to the loan servicing team. Keep origination and servicing teams in close communication so that customers receive a seamless, high-touch customer service experience that lasts beyond the loan origination process.

Maximize your data utilization

In addition to analyzing the mountain of data collected in the origination process, find value in truly listening to what customers have to say about their life goals. We want to know, for instance, how much they want to save each month, or what their retirement plans are. This enriches our data and magnifies its power. Now we can maximize new technologies, APIs and data analytics to better anticipate the customer’s potential need for a new mortgage. Since our focus is on retention, constantly review the lending portfolio against current market conditions. Having that knowledge, and being familiar with customers, allows the examination of their equity situation, and when appropriate, alert them to potential opportunities that they may not even be aware of. That’s a win-win: we’re providing valuable products that our customers need when they need it, and we’re creating customers for life.  

Know (and play to) your strengths.

During periods of higher competition and/or lower volumes, it can be tempting to expand offerings and explore new revenue opportunities. However, the savvy mortgage banker should recognize the danger in abandoning your strengths and investing resources in unfamiliar products. It is important to fully understand what we are good at and can confidently let borrowers know if we are not a fit for a particular product they are interested in. Do not try to be something that you are not – that’s too ineffective in cost, time, resources, and can elevate your risk to an uncomfortable level.

In today’s market, mortgage bankers simply need to roll up their sleeves and do the hard work of building quality products, a solid customer-centered culture within the company, and balancing the need for technology with the value of the human touch.

About Author: Kelli Yarbrough

Kelli Yarbrough is SVP of Loan Retention at RoundPoint Mortgage Servicing Corporation, a national co-issue servicer, loan subservicer, and residential mortgage lender. Roundpoint is an Equal Housing Lender.

About Author: Travis Rulle

Travis Rulle, is SVP of Mortgage Operations at RoundPoint Mortgage Servicing Corporation, a national co-issue servicer, loan subservicer, and residential mortgage lender. Roundpoint is an Equal Housing Lender.
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