High inflation, ongoing interest rate hikes and dwindling refinance opportunities have created some formidable headwinds for the mortgage industry. The extent to which these economic roadblocks will affect the U.S. housing market before prices normalize is still largely unknown. Nonetheless, more lenders are preparing their organizations to weather revenue declines as refi opportunities decline and purchase demand stalls.
These actions can take a variety of forms, including budget cuts, downsizing, reevaluating technology purchases and more. The silver lining is that mortgage originators today have access to tech resources that were not yet available to the industry during its previous major economic downturn. Some of these advancements can help lenders find and convert loans even when opportunities are scarce.
Unfortunately, not every fintech product is worth keeping once budget cuts become necessary. As shrinking profit margins prompt many lenders to lay off staff and cut back on unnecessary digital tools, the mortgage industry’s path ahead looks a bit treacherous.
Lenders attempting to remain profitable in this fiercely competitive, high-rate, low-inventory purchase market are more likely to succeed when they have a strategy backed by automated, real-time insights into consumers’ personal and financial situations. Although software capable of providing this level of insight may sound too good to be true, recent technological advancements have made borrower intelligence one of the most cost-effective tools for generating revenue, lowering production costs and building lifelong business relationships.
If you don’t have access to reliable client data, then you’re already behind your competitors.
That is why, despite current economic uncertainty, one thing remains clear: Lenders that use borrower intelligence to find easily overlooked opportunities will be the best equipped to stay profitable in 2022 and beyond.
If you don’t have access to reliable client data, then you’re already behind your competitors. Lenders that have a system automatically mining their database for opportunities can gain a competitive advantage by being the first to know when a borrower’s financial situation changes or a prospect begins looking into buying a home.
With deep insight into consumers, mortgage advisers can identify high-intent leads within their own database in near real time. In many cases, originators are alerted about promising opportunities that would have otherwise gone overlooked — and ones that consumers may not have been aware of either.
In such a competitive mortgage market, lenders cannot afford to wait around until a client has already taken an action or made a decision to work with a different lender. Technology that prompts lenders to reach out to borrowers before they begin or early in the homebuying process (i.e., when they have a large amount of equity in their home and are credit qualified, or when they first begin shopping for a loan) enables mortgage advisers to take a proactive, offensive approach to lead generation. This type of insight can result in both refinance and purchase opportunities, facilitating conversations about home improvements, transactions involving investment properties and second homes, and upsizing or downsizing into a new home.
Borrower intelligence also can help lenders retain more employees, particularly the top performers who are looking to sustain success.
The most effective borrower intelligence solutions available today can mine far more than just consumer financial data. After all, you should not expect borrowers to be as financially experienced as those who are in the mortgage profession. Comprehensive borrower intelligence can be applied to public records data so lenders also receive notifications about personal life-changing events that occur in their database, like someone getting married, having a baby, sending a child off to college and more.
Having access to this sort of insight empowers mortgage advisers to reach out with a personalized message to spark a conversation. In doing so, they establish themselves as not only a dedicated financial adviser but as a trustworthy financial friend as well.
Remember, mortgage lending is not just about a single transaction. It is important to check in with past and prospective borrowers from time to time so that they feel supported and can understand all of the wealth-building opportunities they have in front of them. Providing this level of service and financial education helps mortgage originators establish lifelong relationships with leads and past borrowers alike, driving repeat and referral business that can help sustain origination pipelines even during an economic downturn.
A powerful, easy-to-use borrower intelligence system is a great way for lenders to add value for prospective employees and build up a team of high-caliber mortgage advisors. After all, what mortgage professional wouldn’t appreciate a potential employer setting them up with a user-friendly system that makes their job easier and earns them more money?
Once adopted, truly effective borrower intelligence solutions can be put to work for new hires in mere moments. Lenders can entice prospective employees by letting them know that, if they choose to come on board, their borrower profiles, prospect records and leads will go into a borrower intelligence system that begins mining that data immediately. Having more complete information about their contact network enables mortgage originator recruits to provide even better service as they maintain client relationships — an enormous selling point to already high-performing mortgage advisors.
Borrower intelligence also can help lenders retain more employees, particularly the top performers who are looking to sustain success. Although they may not have considered it yet, having access to technology that helps them do their job better, provide a better borrower experience and make more money in the process is a unique benefit that employees will not take for granted. If a mortgage adviser is being headhunted by a competitor or is considering a transition to another company, but that company does not provide the same level of borrower intelligence data as their current employer, they are losing an incredible resource.
Real estate relationships can seem a bit one-sided, with purchase referrals typically coming from the real estate partner to the mortgage adviser. This dynamic is not unexpected and consumers most often start the homebuying journey with a real estate agent, not a lender. Mortgage advisers can do more to return the favor to their real estate partners by bringing referral business to them using borrower intelligence.
Real estate agents can share their databases with mortgage originators, allowing their clients and leads to be automatically monitored with borrower intelligence. Sharing this consumer data fosters ongoing collaboration and prompts both parties to take action as soon as a consumer triggers a borrower intelligence alert. Winning over potential referral partners is far easier when you have something valuable to offer: data that allows Realtors the ability to proactively reach out when a consumer begins looking for a new home or experiences a life event that may make sizing their home up or down a logical next step.
Intelligent automation also provides a uniquely irresistible benefit that both lenders and real estate professionals can get behind. No more cold calls. With broad insight into a consumer’s financial and personal data, real estate partners have a relevant reason to reach out to prospects and do not have to waste their time chasing uninterested leads. Having this comprehensive information fosters relevant conversations between Realtors and prospects, which in turn helps them provide superior service.
The benefits that borrower intelligence technologies can offer real estate partners are expansive, so growing a referral network should be a breeze. Once a mortgage adviser establishes a lasting partnership with a real estate agent, the magic really begins. Leveraging borrower intelligence creates opportunities for collaboration that allow the originator and agent to provide exceptional client service simultaneously.
Let’s say a mortgage adviser receives an alert from their borrower intelligence platform that a prospect in one of their databases has just listed their home for sale. In mere moments, the mortgage adviser notifies their real estate partner of this new opportunity, and both can jump into action. While the Realtor reaches out and offers to help the prospect find their dream home, the mortgage adviser can extend an invitation to get preapproved for their next loan and suggest some loan products for which the prospect could qualify.
The consumer does not have to provide basic information like their credit score because it is already being tracked by the borrower intelligence platform. This saves time and effort for both the originator and real estate agent, and it helps the consumer to more quickly take the next step in their homeownership journey.
Rates are up. Applications are down. Loan production is dwindling. There is no denying that mortgage opportunities are becoming less plentiful as 2022 winds down. To prepare for the less abundant housing market ahead of them, mortgage companies large and small are consolidating tech costs, slashing budgets and laying off employees by the thousands.
Although many lenders may be feeling nervous about the housing market outlook, automation is the key to helping them rise to the occasion. If mortgage lenders want to maintain revenue in an increasingly competitive purchase market, a comprehensive borrower intelligence solution is the most effective and affordable technology they can have on their side.
A proven revenue generator, automated borrower intelligence offers mortgage advisers more than just quality leads. It also provides expansive data that makes engaging and converting leads, and nurturing referral relationships, easier than ever before.
An effective borrower intelligence solution should generate enough additional loan revenue to quickly pay for itself while also providing lasting competitive advantages for lenders at a time when cost-effective revenue growth is sorely needed. That is why, above all other solutions, borrower intelligence will prove to be the best digital resource lenders can have in their arsenal to succeed in 2022, 2023 and beyond. ●
Cheryl Messner is executive vice president of customer success and experience at Sales Boomerang and Mortgage Coach. Messner defines strategies to enhance Sales Boomerang’s customer experience, engagement, success and operations to further its growth from a fintech startup to one of the fastest- growing private companies in the U.S. Messner previously served 15 years at secondary marketing services provider Optimal Blue as director of client services and later as director of product management.
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