Shifting the Mortgage Xperience

The Mortgage Industry post 2020-2021 has navigated a significant era shift that is not transitory; it is now fundamental to the industry. Mortgage Advisors, Branch Managers, and Company Executives aligning toward this shift are succeeding and will position themselves to maximize the opportunities ahead.

The era shift isn't because of AI, rates, tech, or the rise of the Broker channel. It is margin compression— i.e. less revenue per loan, driven by consumer demand and competition’s response. Therefore, future lower rates (beginning to happen) and increased refinances won’t be the same parachute for many companies and originators, unless they adapt.

Today’s consumers are more educated and value transparency, an elegant and streamlined tech experience, and thoughtful advice from their mortgage advisor. This is critical because good mortgage advisors who meet those demands will remain relevant despite the threats of AI replacing them.

Consumers are inundated with information as soon as they breathe mortgage, or even before because of intuitive data insights and AI.? Subsequently, they are getting heavily marketed through social media, emails, calls, and referrals.? This causes extra “noise” and a higher likelihood of shopping rates. Therefore, their expectations for thoughtful advice with a streamlined service experience and competitive pricing are now table stakes. This sounds obvious, and many believe they are providing it; however, it is becoming evident that not as many are providing all components considering the widening gap between those winning market share and everyone else.

Additionally, stiff competition for fewer loans with less revenue perpetuates a “race to the bottom;” further exacerbating revenue erosion from concessions, lower pull-through, and heightened pressure to "lower" rates. The traditional answer in low revenue seasons (aside from cost-cutting and layoffs) is to outpace with volume through increased recruiting, winning loans at all costs, and “surviving” until rates drop.

However, these strategies aren’t the answers because of the dreaded bankruptcy-by-volume effect. You can’t raise margins to drive extra revenue due to rate competition, and you can’t lower margins to drive volume through lower rates because of a lack of profitability.? Therefore, as rates drop and volume rises, those still in conflict with a higher cost structure and stuck in traditional ways may not capture their slice of the market and will continue fighting the harsh impact of margin compression and competition taking market share.

Let’s skate to where the puck is going:

Shifting into the new normal for Mortgage Advisors, Branch Managers, and Executives applies individually and in partnership. To thrive in the new era, you must succeed with less revenue per loan by generating economies of scale, minimizing revenue erosion (concessions, loan leakage, too many FTEs per unit, lower pull-through), and providing the best client experience with a competitive price- while earning a profit.?

Let’s look at three areas to generate impact for Mortgage Advisors, Branch Managers, and Executives in the new era:

Key Technology:

Those thriving today use key technologies as a foundation for their business. This is about integrating technology solutions into the DNA of the branch and company with mortgage advisors, branch managers, and executives in alignment and all-in together.? Therefore, key technology, systems, and processes that drive the results of a modern mortgage experience are no longer optional and must be adopted.

A distributed retail sales culture makes this challenging due to varying backgrounds, current usage or lack thereof, sales styles, comfort levels, skill sets, opinions, demands, and a culture built on optionality.

Key technology solutions can maximize revenue, increase lead and loan velocity, enhance the borrower experience, create accountable and simplified processes, and integrate data insights. TrustEngine and its Mortgage Coach platform led by Dave Savage has proven this in the Churchill Mortgage case study. When examining Mortgage Advisors who consistently use Mortgage Coach , this population generates a net 20bps higher in revenue and drives higher conversion when compared to those who do not. How would results like this over the accumulated volume of the branch or company create a positive impact?

MBS Highway, Lender Marketing Platform, Homebot , BombBomb , Model Match , and CRM solutions like Total Expert are other notable key technologies that fit into the modern mortgage experience.? AI solutions will dramatically impact the borrower’s experience, turn insights into actions, increase velocity from lead to post-funding, and reduce minutia with associated cost to produce impact. Mortgage Advisors, Branch Managers, and Executives driving key technology solutions into their business verticals are widening the gap and capturing market share now and into the future.

The Marketing Shift:

Simon Sinek says, “People don’t buy what you do, they buy why you do it.” In other words, people connect with people, not product. Today’s consumer cares less about the company brand and more about who they work with.

The shifting marketing experience is about personal brand identity, in alignment with the company, branch, and team. Because of social connectivity, company “billboards, commercials, and ad campaigns” of the past are no longer appealing – yet many companies still push marketing around loan products and the “billboard.”

What you do and why you do it, aligned with what you offer that solves your ideal client’s problems and creates opportunities, is what’s attractive.? This statement is a baseline for marketing, recruiting efforts, and building lifetime value with clients and referral partners compared to the white noise of company marketing campaigns, dialing-for-dollars recruiting, and transactional selling.?

Leveraging your personal brand identity is not about social vanity; it is about connecting “your offer” to your audience and yourself. As a result, your personal brand extends beyond “marketing” and into your fulfillment. As stated, people connect with people, not product; your clients care about what you care about.?

This is mission-critical for Mortgage Advisors, Branch Managers, and Company Executives to express and leverage– this is no longer just a salesperson thing…?

Your personal brand is the color on top of the white noise.

Essential Humans:

The mortgage industry unfortunately is notorious for hiring and firing due to the flux in volume and profitability over its boom-and-bust cycles. As branch and company leaders constantly right-size, a better goal instead is to create elasticity in human capital with greater economies of scale to minimize these types of market responses.

As a Mortgage Advisor, Branch Manager, or Executive, ask yourself and your team: “If you could build it again with no obstacles, what would you do?”

How would you build your human capital infrastructure with fewer layers, redundancies, and greater elasticity? What key technologies absorb operational minutiae, build compliance guardrails, and leverage key people within each department? What training and support solves problems and creates opportunities? How can AI leverage and scale your human capital?

What if everyone was “all-in?”? Sounds like a mortgage utopia…

Volume swings that dictate decision-making make this difficult. In this new utopia, should all traditional job titles be filled? ??Can you position and scale your best and brightest to prevent and solve problems, integrate tech solutions, align processes and all-in adoption; then leverage skill sets to go wider and deeper throughout the organization and market? The devil is in the details, and this is of course, challenging. These questions should be asked for longer-term thinking and solutions focused on success in a margin-compressed environment, i.e. the new normal.? For some, this could mean a radical change – is that a bad thing, in the long run?

Many are trying to shift, or think they are toward these solutions. However, many are stuck in how they’ve always done it, held captive by their company and its cost burdens, or by those who are unwilling or don’t know how to shift.

I position myself as the Chief Revenue Officer for my clients focusing on helping Mortgage Advisors, Branch Managers, and Executives maximize revenue, drive income, and generate clarity across their key business pillars with a vision-strategy-execution plan that integrates their desired modern mortgage solutions. This applies to Executives leading their company, Branch Managers leading their teams and in partnership with their Executives, and Mortgage Advisors on the front line leading impact with their borrowers and referral partners. This creates agile leadership across the key business pillars so shift happens, at scale.

Here’s the simple math:? Integrate key technologies + essential humans across your verticals to meet consumer demand, maximize revenue, and connect your joy, purpose, and passion to your business. ?

If there were no obstacles in your way, how would you modernize the mortgage experience now and into the future, and are you willing to skate to where that puck is going?

Craig Davis

CEO| Executive Coach | Fractional Chief Revenue Officer