More listings in Q2 added sales opportunities for LOs

Alerts for existing homeowners putting their property on the market grew in the second quarter, it is still just a small share of sales opportunities for originators, a report from marketing company TrustEngine said.

Its second quarter Mortgage Market Opportunities Report noted that new listing alerts from current borrowers increased 26.2% from the first quarter. Even with the jump, however, this category was just 0.77% of monitored contacts for loan opportunity alerts, compared with 0.61% in the first quarter.

"In a market this competitive, lenders can't afford a scattershot marketing strategy," said TrustEngine Chief Visionary Officer Alex Kutsishin in a press release. "They have to use data to zero in on the opportunities with the greatest chance of converting, and that's a moving target that changes month to month and quarter to quarter."

To start, this creates an opportunity for purchase-focused mortgage originators, especially as the median existing home sales price is at $410,200, according to National Association of Realtors data cited by TrustEngine.

In addition, there is opportunity for loan officers to provide their real estate broker relationships with both buyer and seller referrals.

Separately, a report from Zillow noted that 28% fewer new listings hit the market in June versus one year prior.

The alerts are generated from data from TrustEngine's Sales Boomerang unit; its other business is Mortgage Coach.

The largest share for loan officer sales opportunities in the second quarter were from situations in which the borrower's credit improved, at 4.6%, versus 4.73% in the first quarter.

The first quarter's largest opportunity, from the borrower's equity in the home, fell to 1.81% from 5.62% three months prior, a drop of nearly 68%. But TrustEngine said originators need to keep things in context, pointing to Attom data that finds the share of equity-rich homeowners (those whose loan-to-value ratios are 50% or less), is still twice as high as it was three years ago.

Early payoff alerts — where the customer or prospect with a loan closed six months ago or less and has shopped with a competitor in the last 24 hours — rose to 1.08%, 1 basis point higher than in the first quarter.

But when it comes to refinance opportunities for loan officers, cash-out business made up 2.48% of monitored contacts, down 10.47% from the first quarter, when it was 2.77%. Rate-and-term potential more than doubled, but was still abysmal at 0.23%, up over 109% from 0.11%.

Refis were 12% of June's production, and cash-out approximately two-thirds of that, Black Knight's June Origination Market Monitor found.

Taking borrowers out of the Federal Housing Administration program with its life-of-loan mortgage insurance premium is another refinance opportunity for lenders. This group made up 2.07% of alerts in the second quarter, down by 16.9% from the first quarter's 2.49%.

"This quarter, there's an exciting opportunity to help existing homeowners — customers with whom lenders already have a relationship — who are putting themselves in the market for their next home," Kutsishin said.