With the Federal government increasing lending rates four times in 2018, mortgage lending has slowed down considerably as compared to prior years. The Mortgage Bankers Association is expecting a slowdown in total mortgage applications in 2019 even though purchase mortgage originations is forecasted to have moderate growth. As stated in their December 20, 2018 forecast, “The overall total is expected to decrease to $1.62 trillion in 2019 from $1.64 trillion in 2018 as refinance volume continues to decline.”
So what is a lender to do as their mortgage portfolio slowly liquidates and their originators continue to take ever longer lunch breaks? In working with some of the largest mortgage lenders, we have seen the following programs enable our clients to maintain and even grow in difficult lending environments:
Optimize your customer acquisition programs
Although the overall mortgage application market is decreasing, there is still a need for consumers to refinance their loans to change their terms, take cash out of the equity in their house or, even some cases, to get a lower rate on their mortgage. If you are not continuing to mine the credit bureau to find these prospects in your market then you are letting your competitor take these leads. According to Mintel, mortgage lenders sent about 90 million direct mail refinance offers in just the fourth quarter of 2019.
Monitor your current customers to know when they are in market
All three credit bureaus have the ability to monitor your mortgage customers and determine on a daily basis if they are applying for another mortgage. Using this credit inquiry trigger, a lender can quickly react and offer this customer who is in market a competitive offer to address their needs. A lender can use prescreen criteria to generate desirable leads. Using credit inquiry triggers, customer retention can be increased as well as overall portfolio balances.
Establish personalized communications to your own customer mortgage portfolio
Ongoing communication to your current customers is necessary to maintain awareness of your mortgage products and offers. This keeps the customer engaged with your brand and your mortgage bankers. A series of communications (direct mail, email, or telephone) is sent addressing a particular need that the borrower might have based upon your own mortgage data. Triggers can include: an upcoming ARM rate reset on their mortgage, PMI expiration on their loan, their home value has increased to allow for the customer to access their equity, a balloon payment is coming due, and others.
Optimize your web site to be found and used by your prospects and customers
The mortgage buying process begins for many people with an internet search. Deloitte Consulting confirms that the vast majority of consumers use the internet to research mortgage loans before apply. Deloitte found that 93% of individuals researched online as part of their shopping process. Is your web site engaging, easy to navigate and full of valuable information? Are you investing enough of your budget on your web site and customer experience that it provides? How many clicks does it take to get to your application page from the home page? Are you applying best practices around search engine optimization and running paid per click campaigns based upon well research keywords so your web site can be found? Your web site provides the first impression of your brand. If your web site does not build trust with your prospect or customer, how will your mortgage bankers turn these leads into mortgage accounts?
If you are interested in executing any of these programs, SourceLink can help. Contact us today to chat about improving your lending strategy and getting you results.