How Technology Lends To Sustainability And Pipeline Growth For Mortgage Lenders

Spurred by low mortgage rates, the current competitive landscape for mortgage lenders is intense. To remain viable in a saturated market, lenders must leverage automated borrower intelligence to not only attract top talent, but to also improve borrower loyalty and retention.

It is worth highlighting that the utilization of customer intelligence data has been in practice for well over a decade. However, the mortgage industry has been notoriously behind the technology adoption curve. Fortunately, we’ve seen an encouraging trendline of mortgage lenders embracing new tools and technology-enabled processes, especially surrounding artificial intelligence.

Are You in the Top 40 Percent?

According to STRATMOR Group’s Originator Census study, “The top 40 percent of originators account for more than 80 percent of total volume, a measure which has not changed by more than one percent in any given year. That means that 60 percent of an average lender’s sales force produces only 17 percent of total volume. The bottom 60 percent close less than one-half of one loan monthly.”

This statistic is a perfect example of why utilizing an automated borrower intelligence system is an absolute business imperative for mortgage lenders to increase volume. And clearly, based on the information from STRATMOR Group, a large percentage of lenders need help with loan volume. Automated borrower intelligence is the solution.

For an industry based on trusted, authentic relationships, artificial intelligence (AI) may sound intimidating. The truth? Systems that utilize AI manage the behind-the-scenes, freeing up time for mortgage lenders to build rapport with borrowers.

Automated Borrower Intelligence Defined and Applied

Mortgage lenders know that borrowers are critical to maintaining a steady stream of business. Using automated borrower intelligence, loan officers can stay informed about when a pertinent event occurs, such as a change in credit score, qualification for a lower rate, or loan-impacting life events—with no manual labor required. Notifications are delivered directly to the loan officer and tasks are created to initiate appropriate follow-up actions based on the status of the lead, ensuring loan officers stay front and center with their customers through all stages of the customer life cycle.

For example, a borrower that lists their home for sale, improves their FICO score, or undergoes a divorce, becomes eligible for a specific loan product. The loan officer is notified by the system of that change and can then reach-out to the borrower with timely, relevant information. Essentially, the use of automated borrower intelligence technology helps loan officers communicate with their customers at appropriate touchpoints, and this ensures that no opportunities are missed.

You’re Living on a Farm: The Smart Lender Approach

Let’s take a moment to think about your database as a farm and your loan officers as farmers. If as a farmer you work your land, harvest your crops, and retain seeds for the following year, you have become self-sustaining. Further, if you utilize machinery, you are also more efficient.

Smart lenders are becoming experts at farming their database to make sure that when business slows down and the cost of producing one new good opportunity triples or quadruples, they have a steady stream of business coming from their own database. Smart lenders know that their database produces the most profitable deals, happier customers, and ultimately referrals. Incidentally, referrals are the least expensive source of new business. 

Borrower Intelligence is a Must for Smart Lenders

It’s essential for mortgage originators to think about how they plan to keep loan volumes up. Previously, monitoring the client database has been a manual and labor-intensive process that yielded mediocre results at best.

With automated borrower intelligence, loan officers are often the first to know when it’s an ideal time for the consumer to enter the market, and because there is a previous relationship, connecting with the consumer is much easier than a typical lead. By replacing guesswork with data driven actions based on meaningful data, mortgage lenders can work smarter and more efficiently to keep their sales pipeline plentiful.