Blog view: Lenders that are still in business are the most likely to remain in business in 2023. It’s up to those remaining now to decide who gets market share next year and who doesn’t.
New financial data suggests the recession may not be as severe as initially thought.
Growth in 2023 will require different tactics than those that have worked in past waves of refinancing. We have moved to the purchase money business. Even if interest rates reverse that trend, it will take time for the current critical mass of borrowers to benefit economically from refinancing. Growth in this market comes through very important partnerships with business referral partners.
Today, and over the past six months, a real estate agent who hasn’t heard from a loan officer in years is getting a lot of attention.
To cut through this noise, LO needs to offer something better than other competitors. Here are his four ways a loan originator can wow business referral partners today and set them up for success in 2023.
Get into the habit of over-communicating
High on the list of annoyances in the mortgage transaction is the confusion caused by the lender not knowing where they are in the initiation process.
One of the complaints we heard from nearly every lender was that partners were suffering from a lack of communication during the refi boom. There is no excuse for this today.
With loan volumes declining and excess capacity at most lender shops, this is the perfect time to form some new habits. We train everyone so that our partners are fully aware of what is going on in their deals.
Modern loan origination technology has made it very easy to provide status updates to all stakeholders at any time during the process. Proactive communication to referral partners has become a fundamental element that every leader automatically delivers in her 2023.
Your Referral Partner Is Always Right
Over the past few years, the mortgage industry has recognized its responsibility to create a meaningful and satisfying borrower experience. Now is the time to realize that your referral partner is just as important, if not more, than your borrower.
Providing the best possible experience for our renters is always important. It’s a way to win future business in the form of new loans from borrowers or referrals to someone they know.
About 70% of the time our borrowers represent one transaction for most loan officers. A good referral partner can bring you many deals each month. Winning them requires looking beyond the transaction to the lifetime value of that relationship.
Few LOs do this, so an originator who treats their business referral partners like a valuable asset will definitely set themselves apart.
Tune up your tech stack
Traditional mortgage software does not excel at meeting the needs of business referral partners, especially when it comes to effective communication. Lenders who take the time to adjust their tech stacks now will be able to more effectively meet the needs of their partners in the coming year.
Of course, this assumes lenders can change their tech stack. Lenders using older platforms find that developing new workflows is time-consuming and expensive, and are often relegated to being preferred partners for LOS developers.
Modern LOS software provides a robust set of APIs that lenders can leverage to create exactly what they need to process loans efficiently, communicate effectively, and close faster. . Additionally, these next-generation tools are now available on mobile devices beyond the desktop, allowing LOs to communicate with partners from anywhere.
Realtors and other partners have already experienced this API-driven efficiency in other parts of their business, so it’s fast becoming a requirement for all lenders. Using an old tech stack just because LO is familiar is a mistake in 2023.
Expand your loan menu
In the past, time to close would probably have been included in this list as well. During the peak of the housing market, being able to secure a loan quickly was often the difference between winning or losing a bid. But today, with fewer buyers for the same homes and a cooling market, it’s important to qualify more borrowers.
For most lenders, this means offering a wide range of loan products that meet the needs of the most potential homebuyers. Telling your referring partner that you can’t fund a buyer doesn’t build a strong relationship. At the very least, setting the right expectations for your agents’ clients will improve the experience for both agents and buyers.
When a lender qualifies for a new homebuyer, agents will want to see pre-approval, not just pre-qualification. Lenders provide clarity that builds trust by telling partners that the deal will work as long as the title and appraisal work that is the responsibility of the seller continues.
In the past, it was difficult for lenders to offer the type of experience possible today, as lender capacity barely kept up with demand for loan products. Lenders now have no excuse not to meet these promises.
Lenders should consider how to provide a better experience for the home buyers they serve with their business referral partners. All of these should be part of a good business development strategy to fuel her LO actions for the year ahead.
Lenders emerging as industry leaders next year will also take a bold approach to equip their LOs with better technology that will make it easier to wow business referral partners.
Joe Camerieri is Executive Vice President of Sales and Strategy for Mortgage Cadence.