"Today, only a fraction of industry business is coming through [consumer direct], but... lenders that want to be prepared for the future will invest in technology that will... allow them to... go consumer direct when they ultimately need to."
Why the Mortgage World has temporarily gone Consumer Direct
DENVER; Dec. 1, 2020 - For most of us, the pandemic has changed life significantly. The executives managing production for mortgage lenders saw their world change overnight last spring. One day they were managing incoming loan volume through multiple channels and the next day they weren’t. When states initially handed down rigid shelter-in-place orders, mortgage loan prospects suddenly found that going into a lender’s branch office to apply for a loan was no longer an option, nor was inviting a mortgage broker into their home. Most would have predicted a crash in the home lending business. Of course, that didn’t happen.
Low interest rates have ensured a healthy residential real estate market, making our industry one of the first to recover from the pandemic. However, while guidelines to social distancing and stay-at-home protocols eb and flow in rigor, the industry has done so primarily through the digital channels and, increasingly, by going direct to the consumer.
A new dominant origination channel
At the onset of the pandemic’s effects, borrowers that had been shopping for homes and comparing mortgage rates online for years finally began to click the “Apply Now” button or engaged their loan officer via the phone or web. Overnight, the industry was lending primarily consumer direct.
However, this was a trend we’ve seen coming. It wasn’t that hard to spot. With the average age of both the prolific real estate agent and the mortgage broker well above 50, the traditional engagement model has been slowly changing for years. At the same time, the reputational damage the industry sustained during the credit crisis has made it more challenging for the home finance industry to attract fresh talent into the business. Without these advisors on the street bringing new homebuyers to market and new borrowers to the closing table, how will the industry attract new business?
As the ‘new normal’ of pandemic protocols continue to undulate, we’ve seen the industry return to some normal, but restricted activity, such as social distanced open houses or offices re-openings. However, a crucial attribute to the answer has been the consumer direct channel.
Today, only a fraction of industry business is coming through this channel, but the stars are aligned and lenders that want to be prepared for the future will invest in technology that will continue to allow them to work with external, third-party advisors today and go consumer direct when they ultimately need to do so. To get a live demo, contact us today and ask to see the new Mortgage Cadence Platform (MCP).
By Joe Camerieri, EVP, Client Account Management at Mortgage Cadence
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