How should lenders be more strategic about lending in a purchase money mortgage business with volumes down 50% or more, year-over-year?
It can be challenging to create life-long relationships with customers who only come back to transact business every few years. That has been the mortgage industry challenge, even during the hottest refinance booms. Our business tends to be transactional.
This has a negative impact on lender strategy as it tends to simplify everything down to that one transaction. We tend to focus a fair amount of energy on getting a borrower to the closing table, but then focus on another borrower, often not getting back to that first customer until another lender has won their business.
In a purchase money mortgage business with volumes down 50% or more, year-over-year, it behooves lenders to think more strategically. As we begin the new year, this is the perfect time to do it.
We’ve been sitting down with lenders in roundtable discussions for the past four months or more. Our conversations have ranged from marketing to process to technology, but most have been focused on the lenders’ desire to build unique and profitable mortgage businesses in the year ahead.
It may be nothing new to say that lenders care about the borrower’s experience. This has been a strategic focus for the industry for the last few years. The good news is that now lenders are broadening their focus to include their own back-office teams and, given the market shift, real estate agents as well.
Delivering a better experience to borrowers and their agents is a competitive mandate. Lenders who get this right will absolutely win more business.
Delivering a better experience to the lender’s own staff means efficiency in the back office and easier recruiting of loan officers.
The other good news is that lenders know that technology is the key to delivering the kinds of experiences that make them more competitive and efficient. This has sent more of them back to market for a modern LOS.
Much of this is tied up in the loan origination platform’s ability to easily and affordably connect to other innovative new technologies. Heading into this year, no lender wants to be locked out of products, services and lending technologies that can empower them to deliver these experiences.
This means, they are looking for LOS technology built on an open architecture that offers a robust API integration layer without limitations. They don’t want to pay more for a connection just because their partner of choice isn’t paying their technology developer.
And no one wants to be locked into a multi-year contract for an outdated technology platform developed by a company with a history of limiting the lender’s ability to build the business they want.
This may be why more lenders are talking strategically with us about MCP’s ability to help them win more business in 2023.
By Joe Camerieri, EVP, Sales & Strategy at Mortgage Cadence
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