As published in Scotsman Guide's Residential Edition, June 2012.
As the mortgage landscape continues to improve, there are reasons to be cautiously optimistic for the remainder of this year. Although mortgage rates have slightly increased recently, they’re still close to historic lows. With the Federal Reserve aiming to keep those rates steady and with home values stabilizing in many areas of the country, mortgage professionals have many reasons to feel encouraged by the state of the homebuying market.
As the factors for growth align, mortgage originators should look to cultivate effective bank-branch origination strategies. Branch partners who give their clients hassle-free borrowing tools can consider newly acquired households to be the start of long, multiproduct relationships.
Sometimes, however, achieving that kind of relationship can be easier said than done. In other words, how exactly can bankers create effective branch-origination strategies? Consider the following three topics, which constitute some of the most basic — and often forgotten — tenets of quality bank-branch origination.
The costs and time invested in acquiring new households are significant, and branch partners can ill-afford poor customer service. Therefore, the first strategy is one of the most fundamental: Do your research on your audience and know who you’re talking to.
Carefully research the demographic information of the area surrounding the given branch. Is there a multitude of apartment buildings filled with large percentages of first-time buyers, or is the area more of a second-home market? Of course, for first-time buyers, Federal Housing Administration and Community Reinvestment Act products would be most popular. In a more affluent neighborhood, however, you may want to consider the benefits of jumbo products and piggyback options.
Regardless, familiarizing yourself with the population and housing information of the area surrounding the branch’s location is an easy and effective way to position yourself as a reliable source of information for your partners.
To build a successful bank-branch origination strategy, you must properly set the right expectations for your client, as well. After setting up a realistic outlook, it’s then important to manage and navigate through those expectations for all parties connected to the transaction — a balancing act that’s ultimately crucial to any branch’s success. Remember, it is always better to under promise and over deliver than to over promise and under deliver.
The mortgage process has become increasingly difficult for clients, and properly setting expectations is more critical than ever.
Finally, always let your clients know about the benefits of building additional relationships throughout the mortgage process. Consumers appreciate the advantages of a multiproduct relationship with their local bank, and mortgages serve as the cornerstone of that relationship.
Studies have shown that many consumers who have, or plan to have, home-equity products get the product at their primary banks. Celebrate the hassle-free and convenient advantages available at your company or branch and use it as your competitive edge.
Some high-volume branches handle more than 20,000 transactions per month. Many of these customers are current and prospective homeowners, so the potential homebuying opportunities that exist under one roof can be truly staggering. The key to being successful in a branch purchase strategy is to show that your process is equally, if not more, professional and competent than any of your rivals.
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Even when pursuing a higher quality — and higher volume — of bank-branch originations, it’s important to continue working in your comfort zone. If you or your company is presented with an opportunity that’s outside of that zone, don’t be afraid to pass on the offer. Although every opportunity and strategy should be carefully considered, champions don’t always take chances.
In other words, know your strengths in terms of product, pricing and process. In the end, this knowledge, combined with careful strategizing, can spell success for your branch and business as a whole.
Malcolm Hollensteiner is the director of retail lending sales for TD Bank.
He is recognized in the industry as a leader in residential mortgage sales, with more than 19 years of experience in the residential mortgage sales management sector. He holds a Certified Mortgage Banker designation and is a graduate of the Mortgage Bankers Association’s School of Mortgage Banking program and from Harvard University, where he earned a bachelor’s degree. Reach him at (888) 751-9000.