The current U.S. economic environment and the mortgage-industry market contradict each other in many ways. On the one hand, mortgage rates are still below 5 percent, housing values are sky-high, mortgage default rates are extremely low and the national unemployment rate is hovering at or below 4 percent, which is considered “full employment” by policymakers.
Mortgage originators, however, have seen their per-loan profits fall over the past few years. Refinance activity is a fraction of what it was. And the small increase in purchase transactions hasn’t nearly made up for that loss.
Significant changes are afoot in the industry, with new disruptive technologies and a tighter competitive landscape forcing loan originators to adapt and evolve to stay competitive. Success in 2019 requires an active and cooperative partnership between loan originators and lenders. In particular, lenders who give their loan originators top-notch marketing support will see their good producers become great and their great ones become superstars.
Although the analytically obsessed have a host of metrics by which to measure today’s loan originators, the most important statistic is how many loans you close. It’s important to keep a close eye on per-loan costs and profits, as well as loan types, but the number of closed loans is still king.
What should the forward-thinking lender be doing to encourage and ensure the success of loan originators? First, and perhaps foremost, it is essential that your products, offerings and systems allow your loan originators to efficiently close transactions.
It may seem self-evident, but many companies are confused about why their originators aren’t closing enough loans. Far too many executives blame their loan originators for the lack of production without exercising some self-reflection and examining ways they can be better supported.
In particular, originators can be hampered by their company’s marketing efforts. With a bit of self-contradiction, loan originators are asked to be creative and motivated, yet many companies unnecessarily limit their marketing opportunities.
Much of the difference between “good” and “great” is personal motivation, so if the originator wants their own website or wants to maximize their use of social media to generate leads, the smart executive will find a way to make it happen — while keeping in compliance, of course — instead of putting up roadblocks. It’s crucial to provide opportunities for originators to do the hard work of building their own business and creating referral sources.
The method of reaching today’s mortgage client has dramatically changed, and the importance of reaching them first is becoming more and more crucial to success. The speed at which the borrower shops, reads reviews, accesses current interest rates in real time and requests quotes is rapidly increasing.
Successful marketing support includes putting systems in place that allow loan originators to be in contact with current and past customers and referrals, converting the vast ocean of big data into actionable information. Armed with that, savvy originators can better anticipate borrower activity, and make sure they are able to make contact before the prospect has shopped and chosen another lending partner.
Having the right data is crucial, but it’s not enough. What and how originators deliver to their audiences is just as important. Originators need to be supported with custom-targeted marketing pieces that utilize their own personal brand and website.
Borrowers are overwhelmed by ads (experts estimate American consumers are exposed to about 4,000 to 10,000 ads per day) and spam-hunting servers are sharper than ever — a fact that lenders cannot afford to take lightly. Originators need substantial support to ensure their efforts are not wasted or filtered out.
Increasingly, that support is assisted by automated marketing platforms, which every lender should be making available to originators. These systems help prioritize the originator’s work by reducing the time they spend scheduling, targeting and delivering marketing materials. Originators are empowered to spend more time prospecting, increasing touch points with borrowers and making sure their pipelines stay active.
When you add in new industry improvements, such as Day 1 Certainty from Fannie Mae, today’s originator is in a position to offer valuable products and a better-than-ever customer-service experience. But that’s only if they reach the client first.
Social media savvy
Social media platforms simultaneously represent one of the greatest threats and most lucrative avenues for lenders and their originators. Americans spend roughly two hours per day on social media, according to estimates, so originators can’t afford to be off the grid, and lenders must open doors to allow their originators to participate in social media.
With the decline of social clubs and other IRL (in real life) organizations that used to be big drivers of referral business, social media is a crucial part of building a successful origination business. Just ask any compliance officer or regulatory-focused attorney, however, about the potential pitfalls and you’ll hear horror stories.
It is important that lenders provide compliance support to protect their originators (and themselves) from legal or regulatory action. Social media compliance is tricky, but worth the effort. A tip: Do a quick Google search for “mortgage webinar social media compliance” and check out some of the free resources available from industry groups and vendors.
All these marketing tools, social media platforms and tech-focused systems are great, but they don’t ensure success for loan originators. Lender support should focus on two major components of a successful originator-borrower relationship: Closing on time and keeping everyone in the deal in the loop.
Although closing on time should be elementary, many originators get distracted between the opening of escrow and closing, and forget to keep an eye on the process to make sure the loan closes on schedule. Nothing will cost originators more business than failing to close, so marketing support from lenders must focus on this area. Additionally, a track record of on-time closings is a great marketing asset for any originator.
Another thing that must be done is to make sure every stakeholder in the transaction is consistently updated with accurate information. This is particularly true with today’s transparency-minded client who is used to knowing exactly where their Amazon package is at any point in transit.
Lenders should provide support by embracing systems that give originators the ability to keep borrowers and other stakeholders on the same page throughout the process. For the client, it can be extremely frustrating not to know what is going on with their loan, and it can be very rewarding for the originator if they have the tools to provide regular updates.
Marketing support is crucial to originator success and, at its core, that to own their business and put in the required work, but they will never be as successful as they can be without a committed lender behind them.