Residential Magazine

A Mother Lode Waits at Your Fingertips

Learn to leverage your contact databases for a bonanza of opportunities

By Louis Zitting

The mortgage industry is nothing if not competitive, and it’s filled with winners and losers. But in the current economic climate of higher interest rates and home prices, loan volumes are down for almost everyone, everywhere. Sales professionals in general are eager for new ways to generate business, not only to gain an edge over their competitors but simply to survive.

Practically every mortgage originator has easy access to more business and many do not even realize it. In fact, the answer is literally right under their noses: their contact database.

“The bottom line is that contact databases have always been one of the best sources for new business. They simply need to be used more actively and wisely.”

If data is king, as is so often repeated, then an originator’s contact database is the kingdom. Yet there’s a lot of data in this kingdom that is basically asleep because there’s no plan in place to fully leverage it for business opportunities. So, how do you turn around this situation?

Would-be clients

Over the years, originators tend to collect a lot of would-be clients in their databases. Although it’s true that many of these contacts may not have qualified for a mortgage at some point in the past, or they simply decided to wait things out, that may no longer be the case. Without the right strategy or resources in place, however, there’s no way to tell, which means many originators are missing out on golden opportunities to grow their profits.

By themselves, contact databases do a poor job at helping originators identify underserved borrowers or potential homebuyers. But they do contain an enormous amount of data, and when combined with the right analytics, they can easily detect clients who are prepared to make a move.

These tools can analyze an originator’s database and uncover borrowers who may not have qualified for a mortgage a year ago due to things like poor credit, inadequate income or various other reasons, but could qualify today. One of the main reasons this happens is credit migration, which refers to the process by which borrowers move from one credit-score range to another.

For example, during the COVID-19 pandemic, many consumers who planned to buy a home at some point in the future were forced to put their dreams on hold because of job cutbacks or health issues. But as the pandemic waned and the job market came roaring back, many of these consumers have seen their credit scores rise dramatically and may not even know it.

It’s highly likely the average originator has more than a few of these consumers in their databases. Without the right tools in place, however, they’d have no idea. But technology is available that enables originators to track their borrowers’ credit scores over time and identify opportunities to offer refinancing or other loan products.

For instance, let’s say an existing client’s credit score and home equity level have improved since they obtained their previous mortgage. By being able to monitor this information, an originator gains the ability to offer personalized and relevant loan products (such as a home equity loan or line of credit) to help this client make home improvements or pay for other needs.

Past behaviors

Just like data analytics and credit-monitoring tools that can help pinpoint contacts who are more likely to qualify for financing today, new machine learning tools can be used to predict how likely they are to apply — or apply after being presented with the right opportunity.

Machine learning is a type of artificial intelligence that enables computers to learn from data and improve their performance over time. By using machine learning tools, lenders and originators can analyze large amounts of data from their contact databases to identify patterns and trends in individual borrower behavior.

For example, based on the behaviors of past clients, machine learning technology can be used to recognize borrowers in an originator’s database who are likely to refinance their mortgage in the next six months. The originator can then create a strategy for reaching out to these borrowers with messaging on the benefits of refinancing or things their home equity can be used for.

To be sure, refinancing opportunities have dropped significantly in today’s higher interest rate environment. Still, when rates fall even a little, refinancing activity picks up, like what occurred this past March. By identifying borrowers who may not have had the opportunity to refinance over the past two years but could do so today, originators are then able to reach out to them with targeted marketing campaigns and offer them that chance.

Building connections

As every salesperson knows, the No. 1 key to success is to build relationships. This applies not only to relationships with existing clients and prospects but referral partners too. And there’s no better place for an originator to start strengthening these relationships than their database.

Every originator’s database already holds the name of every person with whom they have a relationship. It includes people who previously chose to do business with them and others with whom they once had a conversation about buying a home someday. Yet originators often do little to build and grow these relationships other than robotically sending out emails or canned marketing pieces every month.

By using credit-monitoring and machine learning tools, originators can breathe new life into their relationship-building habits. They can also put themselves in pole position when a past client is in the market for another mortgage, or when a first-time buyer is finally ready to achieve their goal of homeownership. If the originator reaches out at the right time with the right product and follows through diligently until closing, these contacts are likely to become loyal clients for life.

Similarly, many originators have formed great working relationships with real estate agents during their years in business. What better way to nourish these relationships than to reconnect the newly activated clients from your database with your Realtor partners? Many agents will appreciate the gesture since current market conditions have impacted them just as much as any loan officer. Plus, they may not have the same kind of technology to let them know when previous clients are possibly in the market to buy a home.

Sending reactivated clients to your real estate partners can also help to ensure they return the favor by sending clients your way to handle their home financing needs. And remember, some of your contacts who did not come by way of referral may not yet have a real estate agent, so it’s the perfect opportunity to take care of them by introducing them to an agent you trust.

Another look

The bottom line is that contact databases have always been one of the best sources for new business. They simply need to be used more actively and wisely.

Regardless of what is happening in the real estate market, there are always people who are looking to buy a home, make their mortgage payment more affordable, or access their equity for a child’s college tuition or home improvements. But nothing will happen if your contacts are just sitting there. Now is the time to give these contacts a new look, especially when many competing lenders and originators aren’t doing so.

There’s no better way to achieve this than by leveraging data analytics, credit-migration trends and machine learning tools to identify underserved contacts who may be entering the market again. Originators who don’t have these tools readily available would do themselves a big favor by digging deep into their contact database, reviewing past files to see what happened, then reaching out to see where a past prospect stands today.

Remember not to rule out clients with past credit denials either. You never know if and when an existing contact’s circumstances have changed. They may have been declined in the past but qualify today, and they just might be grateful you reached out to them. They could benefit from your insights and financial guidance, especially in today’s housing climate.

But if you really want to maximize these opportunities, consider combining your contact database with new technologies that let you see what others can’t. After all, every contact matters, which is especially true today. ●


  • Louis Zitting

    Louis Zitting is founder and CEO of MonitorBase, a fintech company that monitors prescreened credit information and other real-time behavioral data to alert salespeople when someone is in the market to purchase or refinance a home. Zitting started his mortgage career as a loan originator, where he began developing data analysis tools for his own practice. He founded MonitorBase once he discovered the potential of analytics to fill a valuable need for loan officers.

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