One Data Set Changing Mortgage Retention
How technology helps lenders turn borrower information into customers for life. (Source: National Mortgage Professional)
As the homebuying season picks up in the spring, so do mortgage payoffs. It sounds alarming, but it’s expected — borrowers pay off mortgages when they buy new homes.
This year will be one of the worst to struggle with repeat business, which is the single best way to support originations. It also is the best way to grow a mortgage business long term.
A lost borrower can mean more than just one lost mortgage. Depending on the market, a lender that loses a borrower after a first home purchase could be missing out on three to five more originations during that borrower’s lifetime, making retention critical as market uncertainty continues to impact volume.
Simple Data, Valuable Applications
Earning repeat business from customers requires lenders to examine their offerings from the customers’ viewpoint. Technology is changing how lenders find and help customers from their databases using one simple, but important, piece of customer data: home addresses. Lenders are now using automation to monitor the Multiple Listing Service for new home listings that overlap with past borrower addresses. Increasingly, marketers and loan officers know exactly who is listing their home for sale, what engagement should happen next, and who on the originator team should activate to help serve the potential homeowner’s specific needs.
Greater Influence on Referrals
Real estate agents are very important in the home-buying process because they often refer borrowers to lenders they trust. However, sometimes agents don't refer borrowers to lenders they've worked with before. Lenders are now using credit monitoring technology to track these non-referrals. Homebuyers often shop around for lenders to find the best mortgage payment and interest rate. Lenders are using new technology to reach out to past borrowers and offer them education and rate options so they can be the borrower's first choice when they are ready to buy a home or access home equity.
Serving Equity-based Borrowers
Lenders have an opportunity to educate homeowners about their options to use their equity for renovations, debt consolidation, or surprise expenses. However, it can be challenging to segment borrowers who have enough equity and engage them with personalized messaging. To overcome this challenge, lenders are using automated tracking and tailored messaging. They are also targeting people who have just sold or purchased a home, and who spend more on items such as appliances, furniture, and home improvements. Lenders can finance these purchases and educate homeowners about their options.
The Key is Data Transparency
The mortgage industry can benefit from using customer banking data to identify new mortgage opportunities, which can lead to revenue growth. For every 50,000 contacts monitored in a mortgage database, lenders discover nearly 1,250 additional mortgage opportunities per year, according to lender data gathered by Total Expert. Technology can also help reduce overhead and marketing costs, which can contribute to higher profitability. Mortgage leads can be costly, but lending technology can help save costs and activate top-line growth.
With significant opportunities in originations and profit growth, mortgage originators have a clear incentive to solve their retention challenges using new data-driven technology and even bigger upsides await in relationships.
Techniecode understands the importance of retaining customers in the mortgage industry. Our innovative digital lending solutions enable lenders to not only identify retention opportunities but also to streamline processes, reduce overhead costs, and improve the customer experience.
Partner with Techniecode to take advantage of cutting-edge technology, maximize retention, and create long-term value with customers.