The unprecedented events of the 2020 pandemic have resulted in a rare and extraordinary loan convergence that continues into 2021: Motivated buyers exploit historically low mortgage rates to gain more purchasing power while sellers respond by increasing house prices.

The loan market has delivered the results. The recent Black Knight Mortgage Monitor report found $ 4.3 trillion in mortgages created in 2020 – $ 2.8 trillion in refinances alone – with the last quarter of 2020 seeing a record 869 billion dollars in refinancing loans. In addition, the Mortgage Bankers Association (MBA) has indicated that 2020 will be the strongest year for the mortgage industry since 2003, with average purchase loan amounts reaching the highest value on record since the launch of the mortgage industry. ‘1990 MBA survey.

Despite rising interest rates in the first quarter of 2021, Black Knight expects the quarterly refinancing loan volumes to remain near the high of the fourth quarter of 2020.

But it won’t last forever. In fact, the loan market is already showing symptoms of an impending end.

A shocking figure:

Since March 4 – when the news reached interest rates exceeding 3% – the number of remaining high-quality refinancing applicants has declined by 30% in just three weeks, reaching its lowest volume since May 2020, according to Black. Knight.

“When two waves meet and their ridges and troughs line up, the resulting energy creates a much larger and extremely powerful wave – what surfers call a ‘double up’ wave,” said Joe Welu, founder and CEO of Total Expert. “Right now, a huge but short-lived double wave in the loan market is offering lenders a business boom. This is why we call 2021 “the year of the loan officer”. But this double wave does something else too: It puts tremendous pressure on a loan officer’s precious but limited time and attention. “

Marketing automation platforms designed specifically for mortgage lenders – like the one offered by Total Expert – best allow loan officers to become the efficient, knowledgeable, and accessible resources borrowers need.

“Research shows that lenders who help a borrower with a key financial decision today – especially lenders who invest in the customer experience – are more likely to hold that borrower’s business for a lifetime,” he said. explained Mr. Welu. “More than ever, lenders need marketing automation platforms specifically designed to enable loan officers to intelligently engage with clients and members in the most meaningful and valuable ways possible, all by becoming as efficient as possible operationally. “

Three Steps to a Stronger Mortgage Transaction

Using marketing automation designed specifically for mortgage lenders, Welu says lenders can make three immediate improvements to their lending operations – improvements that can help them further benefit from the double-raise wave of 2021.

1. Market for good borrowers

Mortgage lenders need powerful prospecting and lead generation tools that they can use to more effectively deliver personalized and effective messages to borrowers, all from a single technology platform. Marketers can, for example, create seamless, multi-channel, cross-device campaigns with cutting-edge content that engages borrowers at the right time, in the right place. They can also use consumer data and behavioral analysis to intelligently automate marketing messages to align with each person’s unique financial journey.

Lenders leveraging marketing automation in this way provide more personalized and relevant communications, so borrowers feel valued and confident in their financial future. Consumers who use Total Expert, for example, reduce processing times by 20% on average, generate 35% more referrals, and receive 16 times more loan requests – requests with a consistent 70% success rate.

2. Improve the productivity of loan officers

Borrowers look for loan officers who are savvy and trusted financial advisers who provide better service and more information than others. But loan officers must be equipped with the technology to deliver greater value to borrowers in every interaction. Teams that engage with consumers, for example, need lead generation and predictive analytics tools to quickly identify the next best action for each borrower. Built-in automation further streamlines campaign development for them by minimizing the number of routine processes and manual workflows to perform.

On average, loan officers with the right technology take 5.9 more loans per year than those without. One specific organization increased loan officer productivity by an additional 3.28 loans per year in the first year, an additional 4.59 loans per year in the second year, and an additional 5.90 loans per year in the third year. Gross profit per loan also increased 107%, from $ 1.5 million. the first year to $ 3.1 million the third year, according to September 2019 Forrester Study.

3. Offer a proactive and personalized service

With a 360-degree view of unified consumer data, loan officers can provide better product and service options for borrowers throughout their financial journey. They can create personalized experiences that have greater impact by tapping into actionable data, like a borrower’s contact details and relevant behaviors.

Loan officers offering this type of exceptional experience are those who, for example, proactively alert borrowers with private mortgage insurance (PMI) when market opportunities arise to eliminate such expenses. It is also these loan officers who deliver a more personalized customer experience with simple but insightful actions, such as using the borrower’s preferred communication method or demonstrating in-depth knowledge of past mortgages.

“We’ve all heard how much easier it is to retain a current customer or member than to get a new one – at Total Expert we like to call it ‘playing for good’,” Welu said. “Until now, most lenders couldn’t engage and retain long-term borrowers because the data access and advanced personalization needed to deliver a unique, seamless experience was just too difficult to achieve. But the right tech partner can do it for you. “

According to a Forrester study, lenders who make the three improvements described above saw benefits of about $ 6.1 million in increased revenue over three years, compared to costs of about $ 1.5 million. . It added up to a net present value (NPV) of around $ 4.6 million, with a payback period of less than nine months and a return on investment of 321%.

Who will win?

Clearly, lenders with knowledgeable and tech-savvy loan officers are poised to seize the lion’s share of mortgage opportunities this year and years to come.

Loan officers who provide exceptional personalized service will drive the growth of lenders who are investing now rather than adapting to the needs of borrowers. With the right technology partners – those who deliver ROI in months rather than years – mortgage lenders can capitalize on today’s strong demand and build sustained growth for decades to come.

About Total Expert:

Total Expert is a fintech software company that built the first experience platform specifically designed for the modern financial institution. The platform enables sales and marketing teams to leverage data to seamlessly deliver relevant products and services to each person based on their financial goals.

Total Expert focuses on the unique compliance needs of financial services organizations that need to integrate industry-specific data and applications to deliver a consistent experience across the consumer lifecycle. For more information, visit totalexpert.com.