“By not preparing yourself, you are preparing to fail. Although John Wooden was not the first to express these feelings, it has become one of his best-known mantras and arguably the soundtrack of more than one of his 10 national championships. For Wooden and his teams, preparations were made during the offseason, in training, in the weight room, etc. to excel during games and the season.
The mortgage industry continues to have record numbers, but those numbers have started to decline and lenders looking to succeed in a slow market must start preparations today.
Recent trends indicate that the mortgage market is starting to see the end of the refinancing boom and enter a heavy buying market. This is not news, nor is it the fact that although the number of refinances and mortgage applications have declined recently, there have always been record volumes.
This is because changes in trends do not result in an overnight change in market maneuvers. Fortunately, this gives lenders the privilege of knowing where the mortgage market is heading with enough time to prepare for when it gets there.
As economists examine things like recent increases in the Consumer Price Index and what that might have on short-term mortgage interest rates, as well as the ripple effects that will affect Managing margins, expenses and long-term profitability, lenders should consider the impact of resulting margin management on their operations.
As margins tighten, lenders will be forced to cut costs elsewhere and invest in a technology stack that will improve efficiency, automate manual tasks, and handle peaks and troughs in volumes. By preparing their tech stack today, lenders will be poised for success in the future.
While new technology has a reputation for breaking the bank, the average lender spends less than 10% of their overall operating costs on technology. Without the adoption of loan officers, these expenses become frivolous, making a lender’s decisions about which technologies to include in the tech stack extremely important.
By focusing on technologies that improve the borrower experience and save loan officers time without losing the personal connection with the borrower, lenders are building their technology stack and at the same time improving customer service.
There is plenty of data to back up claims that borrowers want some sort of digital mortgage experience, but don’t want the customer service aspect to suffer. Additionally, borrowers said the two most popular aspects of an online application process were “a simpler application process (55%) and shorter time to close (53%). With 91% of lenders applying online, the best way for lenders to differentiate their digital mortgage experience is to offer easier closings, faster turnaround times, and better customer service.
In a market where there are many buys, the close can be a bargaining chip for the borrower, and in the event of a shortage of inventory, the option of offering a 15 or 20 day close could be what allows your customer to win the contract. Creating a technology stack to increase closure efficiency is not just about offering eClosings. Increasing the efficiency of closing means implementing the right mix of technologies to increase the efficiency of all of a lender’s mortgage operations, from demand to post-close.
In addition, implementing the right digital processes can not only increase efficiency through reduced lead times, but can also lead to cost savings through reduced operating costs and interest savings by delivering faster loans to market.
“Above all else, preparation is the key to success. Alexander Graham Bell’s words still ring true as lenders who invest in a technology stack today and spend the time necessary to implement technologies to increase closing efficiency will be poised to succeed in the marketplace. imminent mortgage of the future. Without planning now, lenders will feel the inevitable pressure of squeezing margins and increasing expenses.
Matthew Mackey is National Director of Sales and Marketing at IDS.
This column does not necessarily reflect the opinion of the editorial staff of HousingWire and its owners.
To contact the author of this story:
Matthew Mackey at [email protected]
To contact the editor responsible for this story:
Sarah Wheeler at [email protected]