Ancillary service providers are looking to help their mortgage origination clients with strategies for them to improve their volume going forward in 2013.
Consumer interest—at least in percentage terms—is already shifting toward purchases in some states, according to MortgageMarvel.com’s mortgage shopping website. Approximately 57% of those searches for a loan in Georgia in January involved a purchase, while in Wisconsin, it was 46%.
Rick Allen, the chief operating officer, at Mortgage Marvel, said among his theories for the increase in purchase activity is the low level of mortgage interest rates plus the consumer perception that the housing market has bottomed out and is now in recovery mode. Home appreciation is occurring again, albeit at a low level, across the board. Mortgage Marvel addresses just online applications, but it likely mirrors overall activity. Allen said the company’s data are consistent with the mortgage application data put out by the Mortgage Bankers Association.
Mortgage Marvel is a believer in the fact that to be successful in today’s mortgage environment, you need to be able to meet your customer online. Allen said a large number of transactions performed on Mortgage Marvel occur during non-business hours, when your typical mortgage shop has closed for the day.
“Consumers more and more are looking for convenience in anything they do,” he said, although many still would like to meet with their loan officer at some point eye-to-eye or phone contact.
Online application capability does not take the human element out of the transaction, but it does facilitate the originator’s ability to capture the client in the first place, Allen said.
FocusIt Inc., a Software as a Service technology company which helps to enhance sales and marketing for originators, has a product called Pulse, which CEO Josh Bopp said is designed to help manage prospects, referrals and past clients.
The company got its start hosting loan origination systems for originators. At the urging of its clients, it developed Pulse, which plugs into the LOS platforms and extracts data for the originator.
It helps manage their leads as well as provide automated task management, Bopp said, comparing the latter function to Outlook’s task function on steroids.
The task function allows the underwriter and/or processor to handle more loans while working the same amount of hours.
Pulse also automatically sends out marketing notes to referral sources, improving the originator’s presence in front of those people.
There is an automated drip marketing system in Pulse. “It is really about improving efficiency and giving you a better presence, a better standing with that particular customer, whether that is a potential customer or a current customer,” Bopp said.
The other efficiency gain is that by importing the data from the LOS, the information does not need to be rekeyed and possibly subject to errors.
As far as content goes, FocusIT has just entered into a relationship with Greg Frost, a well-known trainer and speaker in the industry. His sales and marketing tools, including the ACTion! Marketing System, Daily Communicator and Call Capture Marketing System, are being integrated into Pulse. This content will be available shortly.
Bopp noted that users can still continue to use their own marketing content with the system as well.
Wipro Gallagher Solutions helps originators to improve their volume in a number of ways, said Teresa Blake, practice director at the company. The first is data mining and analytics.
For some of its large lender clients, Wipro Gallagher has worked on projects using the data they already have and using it to increase their lead to application rate. She said the company was looking to identify common factors that result in pulling through those leads more quickly and get a higher rate of return.
Another buzzword is mobility. Wipro Gallagher has a number of applications for its clients in this area now, and it is working on the next generation.
Finally there is performance. To the typical real estate broker, the loan officer is only as good as his or her last transaction, Blake said. While there is belief the turnaround cycle has been shrunk as much as it could be, the truth is with all the regulatory changes elongating workflow, companies like Wipro Gallagher help lenders re-engineer practices to get wasted time out of the system.
It is both technology and industry expertise that Wipro Gallagher brings to the table in helping craft solutions. Lenders are looking for both accountability and consistency in process.
While the belief is that buying more leads or better focused leads will contribute to more closed loans, if the pull through is not as good as it can be, the company is just wasting money, she said. So process is a key element because improved process with better turnaround times is what leads Realtors to refer more business to a lender. Or, as Blake pointed out, a failure of process (such as getting the loan ready to close as scheduled) will cause partners not to refer clients to a business.
Narayan Bharadwaj, business head at Wipro Gallagher, said originators need to be aware of the power of relationship-based selling. Using products such as Enterprise Mobile Origination help relationship-based selling.
“We view the loan officer a white-gloved concierge, being able to deliver superior customer service,” Bharadwaj said. The e-Mo solution is an app for the iPad, which interfaces with any loan origination system.
Mark Coupland, vice president, business development at LoanSifter, said his company recently co-hosted a webinar with lead aggregator LendingTree about getting purchase business, which had 150 people registered.
Working with aggregators like LendingTree, Zillow and others, he said, is one way to get in front of customers.
In anticipation of rising rates LoanSifter is getting a lot of interest regarding tools it offers to deal with a purchase market.
Reaching the front of the borrower’s mind today, he said, means having a strong online presence.
LoanSifter’s automating marketing tools are getting a lot of use these days in anticipation of the return of a purchase market. For example, users can set up triggers to notify potential borrowers.
“Having information at your fingertips around when those borrowers are going to qualify for the rate that they are looking for, it really helps you get in front of that borrower before somebody else does,” Coupland said.
Originators need to have a platform to get that information out. “You want to be the first one there, top of mind, front of mind,” he declared.
Kelly Booth, the director of the mortgage unit at Leads360, a lead management technology provider, said the shift from refinance to purchase itself changes the dynamics for originators. Not only does it change the type of lead being sought but how those leads are handled.
That, she said, even goes as far as what loan officers are brought onboard. Homebuyers are influenced by their Realtor and there is a need for someone with strong relationships or who can create them.
This is true even for Internet leads, because without a connection to the real estate agent, the originator is not getting the borrower.
Booth said mortgage lenders have not spent a lot on technology in the lead area, but on LOS and fulfillment. Now lenders are looking to improve the lead area and their marketing through the use of social media.
For purchase-based leads, once they are in the system, Leads360 helps the originator to qualify the lead. Based on the qualification, the lead is distributed to the loan officer who has the best skills to close it using performance-based analytics. The criteria can be set in the system.
Leads360 can also do analytics based on lead sources, including whether that lead from that source turned into a closed loan.
Speed to respond is the major influencer of choice of lender, she noted. This is especially true today because of the competition that is seeking to land the loan.
Still, some companies do not respond directly to the borrower in a timely fashion, and thus lose the customer, she noted.
Fiserv’s, Pete Radike, director of product management, noted that while origination technologies continue to evolve, they are only as effective as the lender’s ability to use those new capabilities.
“There are elements such as policy management, workflow processing, data management, reporting, auditing as well as regulatory compliance—all of those elements continue to drive a lender’s success to be able to grow their business,” he said.
So it’s how the technology is deployed and implemented, rather than just the technology itself that is key for a mortgage lender to be able to grow its originations, Radike said. There are many sophisticated capabilities in the software, but it is how lender chooses to use them is what makes the difference.
Among the trends Fiserv is seeing is that the mortgage industry is “reinvigorated” and ready to do more business. It has been triggered by the introduction of capital into the business, the improving economy plus the government’s housing goals, he said.
But challenges remain, including the new rules and the “less than precise definitions” from Consumer Financial Protection Bureau which is affecting the pace of growth, Radike said. It is adding cost and effort to lenders, who now have a higher expectation from their technology and its providers to help them manage their business. “Compliance is one of those words that is much more far reaching than the dictionary term,” he said.
Still, Radike does not see refinancings going away entirely. Consumers who refinanced in the last one to three years still might be able to lower their rate or get an alternative program if they desire.
The second group, which can also include potential purchase clients, consists of “credit-recovering consumers who, after several years of poor credit, are successfully moving into the new mortgage (or refinance) markets. This latter group is a significant population, and naturally would be attracted to refinance since they were ineligible during the economic downturn and/or had lower credit score profiles during that timeframe but have since improved to become eligible for newer refinance offerings,” he said.
