Jan./Feb. 2023 Issue

Trends The Mortgage Industry Should Consider For Success In 2023

It’s no secret that today’s mortgage environment is continuously evolving at a rapid pace. To best keep up with the latest trends, mortgage professionals need to ensure they are staying competitive while meeting customer needs, market demands and shifts, all while managing risk. While there is certainly no crystal ball, there are areas that mortgage professionals should be thinking about to best prepare and compete in the evolving market.

Differentiated Data Insights
While traditional credit reports remain a strong indicator of credit history and past financial reliability, thin file, young and “unscorable” consumers may not have strong enough credit files to obtain a traditional mortgage. That can potentially change expanding the use of various insights to capture more accurate indicators of financial strength to open the door for U.S. consumers that may benefit from additional attributes into their financial profile. For example, delivering differentiated insights, such as telco, pay TV, and utilities attributes alongside traditional credit reports can help provide additional insights on 191 million U.S consumers. With differentiated data attributes the industry has broader visibility into consumer creditworthiness, streamlining the mortgage underwriting process and providing greater access to credit – opening the door to home ownership.

HELOCs (Home Equity Line of Credit)

Rising home values, flat wage growth, record levels of consumer debt and interest rate uncertainty have driven HELOC loan origination to record highs. Many lenders are seeing an increase in requests for HELOCs from homeowners looking to take advantage of their tappable equity. In order for mortgage lenders to meet the demands of the HELOC market, they must take advantage of automation and instant access to data. HELOC lenders must utilize a digital process to identify marketing opportunities, mitigate portfolio risk, and maintain regulatory capital requirements. A combination of predictive analytics and event-based insights help lenders better capitalize on fast-moving market opportunities, and digital processes help increase operational efficiencies. Those lenders that maximize the use of the improved data analytics and insights will be better positioned to meet these demands and maintain a profitable business model.

Managing Risk in an Uncertain Environment

Mortgage professionals who have better insight into their portfolios are better prepared to combat issues ranging from mitigating delinquency risk, defaults and foreclosures, as well as increasing efficiencies with non-performing loans – all helping to improve overall profitability and predictability over time. Evaluating more data in a compressed time frame demands greater levels of automation and data integrations. In today’s market, the most successful lenders are those that are able to best meet consumer expectations of speed and convenience and deliver on that in a way that does not put themselves at undue risk. Integrating the insights of third-party data can be a key step toward success.

The one thing that is certain about the mortgage industry is that it is constantly evolving and technology continues to progress to best meet the market demands, which will ultimately help consumers live their financial best.