What strategic considerations should lenders be discussing with their technology partners as they plan for the new year?
As we enter the fall conference season, many lenders are making strategic considerations for the coming year. As they enter into communications with trusted vendor partners, there will be a number of key issues that come up in virtually every conversation.
Here are three questions I have been hearing and expect to be discussing in depth with my partners this fall.
Lenders are already seeing a shift in their business mix. The Mortgage Bankers Association’s August mortgage finance forecast is still calling for refinances to fall from nearly 60% of lender business in 2020 to only 25% next year. That’s a huge change for lenders and it will force them to revisit their origination process.
The workflow for purchase is different than refi and the lender needs either people or technology (or both) at every touchpoint in the process. Without the right staff in the back-office loans won’t get processed. There is nothing more demoralizing for a loan officer than finding out that the business they have worked so hard to bring in can’t be closed.
Smart lenders will make sure that they have adequate mortgage fulfillment capabilities through strategic outsourcing partners on deck to deal with a flood of new business. Many already have this in place due to the crushing volume the industry saw in 2020. Those that don’t will be talking about it at the fall conferences.
Lenders now have access to some great business intelligence (BI) tools, but many are still struggling to pull insights out of the data they already own. Lenders who can master the art of data analytics will have many advantages over those that don’t.
I’m talking to lenders now who need to know what analytical tools they should be using and what insights they should be looking for. Many already understand the power in these tools, but are using them primarily for compliance. Knowing what a regulator will find in your HMDA data is good, but there is much more the lender can learn from the information sitting in their database of record.
One of the best ways to leverage BI is to use it to find out what customer niches the lender is really serving well. The more you know about your existing customers the easier it will be to find more like them and serve those leads up to your loan officers.
No one can ignore the M&A activity that has been changing the face of our industry over the past few years. Virtually every lender we’re talking to has asked themselves if this was the right time to sell their businesses. On the other hand, we’ve had a number of conversations about purchasing a business to achieve growth goals.
I will be writing about this topic elsewhere on this blog as I know it’s on many minds this conference season.
If you’re planning on getting back on a plane this fall and making your way to one of the upcoming industry business conferences, there’s a good chance that someone from the Mortgage Cadence team will be on hand at the event. We would love the opportunity to sit down with you and talk about what’s been on your mind as you make your plans for 2022.
By Joe Camerieri, EVP, Client Account Management at Mortgage Cadence
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