Today’s mortgage industry is competitive. With the onslaught of nonbank lenders, digital solutions and fintech companies that have hit the sector, it’s becoming increasingly important for lenders and the originators who work with them to differentiate themselves.
It’s not just about standing out from the pack that matters. To stay competitive, originators need to push the boundaries and find new, innovative ways to do business. They need strategies that not only attract new buyers and investors, but ones that increase their internal efficiencies, reduce their risk and maximize their return on investment at the same time.
Property data is one way many originators are doing it. Data has never been more accessible. With the right data solution, originators can tap everything from property values and credit histories to ownership records, liens, flood determinations and more all with- in seconds, and it’s giving them unprecedented power.
It can give them a clear picture of borrowers before even meeting them. It allows them to understand the risk a loan presents from every angle, and it can even ensure better compliance, stronger marketing efforts and a more empowered workforce on the whole. Here are just a few of the ways today’s originators are using property data to their advantage in the ever-competitive mortgage landscape.
Segmentation, or sending focused messages to targeted groups, makes for significantly better marketing results. In fact, according to a 2017 Mailchimp study, prospects are 75% more likely to click on an e-mail from a segmented campaign than a non-segmented one. (That’s three out of every four leads, if you’re counting.)
Fortunately, originators are starting to catch on to this, and they’re using property data to drive much of their marketing efforts. With data on their side, originators can segment by a wide variety of characteristics, including occupancy status, equity amount, loan balance, property value, number of properties owned or even length of time owned.
Once this data is known, marketers can divide their leads into separate, tightly knit lists, with each list receiving highly specific messages tailored to their place in the buying, selling or investing process. The data also can inform exactly who should reach out, when and by what method.
For originators, this deep-dive segmenting can be what draws one borrower away from a competitor or what keeps a client who is refinancing in the fold. It also can allow for better-targeted messaging and creative efforts, while simultaneously building a stronger rapport with leads through relevant and well-timed outreach efforts.
A long, drawn-out application process is a turnoff to today’s fast-paced borrowers, and it’s often what sends a buyer running to the competition. With the right property-data application program interfaces (APIs), though, mortgage companies can actually prepopulate large swaths of their application forms, easing the process and removing much of the friction for the end user. An API is a software-to-software interface that enables applications to easily communicate data back and forth without the need for user awareness or intervention.
Lenders are using this same approach in their internal underwriting processes. Rather than relying on tedious, manual input of information, originators are letting data APIs prepopulate their forms, simultaneously speeding up the process and reducing costs.
Strong, long-term revenues depend on underwriting equally strong and high-quality loans — and data is helping the mortgage industry do just that. Using property data, originators can take into account not just a borrower’s credit profile, but all kinds of supplemental information that influences the loan’s risk. Historical preforeclosure notices, past defaults, real estate-owned properties and other property records all help shed light on a borrower’s reliability and likelihood to repay.
In the same vein, originators also are using property data to better verify compliance with industry regulations. A key component of most major loan-risk models, data APIs can confirm that a loan checks all the neccesary compliance boxes — and do it quickly, efficiently and in a way that minimizes the internal resources required.
Digitize the experience
Half of all recent mortgage borrowers chose their lender based on whether they had an online application available, according to the 2019 Borrower Insights Survey from Ellie Mae. And with more millennials buying homes, this cohort is only going to grow in the coming years.
Flexible property-data APIs play a critical role in this digitization, as lenders use them to:
- Prepopulate applications and forms to speed up entry.
- Assess borrower risk.
- Automate online prequalification processes.
- Determine property valuations.
The impetus to digitize the mortgage process has never been stronger. Today’s borrowers don’t just want easy, digital processes when they buy a home — they expect it. Data is the key to making it happen.
And getting a lead is only the first step in the client-acquisition process. An originator still needs to nurture that lead, offer them value and prove their worth if they want to close the deal — and that’s not always easy.
Although property data can’t persuade the borrower to choose one lender over another, it can empower an originator to better nurture that lead. With access to the client’s property history, data on the home in question and the area’s sales and market data, originators are able to better prepare for those important calls and touchpoints with leads. They can anticipate the borrower’s needs, offer more relevant value and better guide the conversation, ultimately and significantly boosting their chance of closing the loan.
Building out loan files takes time, but it’s a necessary and legally required part of the job. There’s tedious research, time-consuming phone calls with counties and waiting periods to get the documents required to underwrite and close the loan. Every single one of these tasks is another minute wasted and another dollar spent.
Smart originators are using property- data APIs to ease this process and cut down on tedious record pulls (and the costs associated with them). With the right data tool, processors can search, locate and retrieve a property document all within seconds, ultimately improving operational efficiency, cutting down on costs and instantly speeding up the loan’s time to close.
In an increasingly competitive mortgage industry, data gives originators much-needed leverage. It offers deeper insights into each transaction, enables better service of today’s digitally savvy consumers and increases return on investment through improved efficiencies and reduced risk. And for many lenders and originators, it’s just the difference-maker needed in today’s crowded marketplace.