You know what they say: quitters never win. Sure, the compliance burden is increasing. Sure refinances are decreasing. Sure the cost to originate is increasing. To some this may all be bad news, but to the opportunistic lender this is a chance to grow.
How you might ask? First, you have to find a way to capitalize on the purchase market. “We’re looking at the evolution of technology from a marketing standpoint,” said Robin Blatt, the Director of Marketing at St. Louis-based Mortgage Returns, a provider of database-driven, CRM and automated marketing solutions for the mortgage industry. “When you think about it, technology can enable lenders to thrive in a purchase market. Here at Mortgage Returns we are trying to recommend to our clients to focus on their past customers as a great source of new business, both purchase business and for referrals.”
To this end, late last year Mortgage Returns enhanced its technology and services to enable mortgage originators to maximize their return on investment by marketing more effectively to their customers, prospects and referral partners. Enhancements enable mortgage originators to automatically upload new customers and prospects from the LOS directly into Mortgage Returns; order direct mail straight from Mortgage Returns’ new Storefront marketing solution; reach Spanish-speaking customers with one-to-one direct mail and email marketing; create company, branch and loan officer websites; and gather valuable feedback on the mortgage company and its loan officers through a post-close email survey for borrowers and realtors.
“We are trying to keep our clients really laser focused on the business they can get from the clients that they currently have is a big part of succeeding today,” added Blatt. “And with technology you can use methods like one-to-one messaging so you are marketing directly to a particularly clients about their loan, with unique messages sent directly to them. In the end, strategies like this are helping strengthen that relationship and a sophisticated technology enabled that to happen. You need to get more business from your past customers and keeping them close.”
A clear challenge for most lenders is knowing when it’s time to embrace new technology like a CRM solution, a new LOS, etc. “What we see happening in the market today is that lenders chose a given technology solution in order to solve a specific problem,” noted Steve Wiser, CEO of Cleveland-based Specialized Business Software, a provider of custom software solutions for insurance, mortgage and financial services companies. “At the time that’s great, but we all know one thing about problems, is there are always new ones popping up and old ones are continuously changing. In the any industry, problems continuously evolve and it can be hard for software systems to adapt to so much change over time. I think that’s a big issue that you run into when you are using older technology.”
Specialized Business Software experienced a lot of growth last year. Specialized Business Software attributes this growth to increased awareness within the financial and insurance industries about the benefits of automated custom software and a large number of repeat customers who value being able to reduce the time it takes to complete basic business processes by as much as 90 percent.
Specialized Business Software also released two new products in 2013. Docunym 2.2 is an enhancement to its Web-based document management and workflow solution, which helps users manage and retrieve mortgage loan documents faster and more efficiently. The X12 EDI Translator is a Web-based solution enabling mortgage servicers and insurance tracking companies to translate insurance policies from the X12 format into a more readable form, which eliminates the need to develop and maintain an internal electronic data interchange system.
“Another force that we’re seeing in the mortgage space is that lenders are looking to incorporate technology that they can roll out to the consumer,” pointed out Wiser. “Borrowers are used to dealing with their apps and their websites. As a result, these borrowers are expecting ease of use and they’re expecting that from all of their business partners, as well. And if you can’t provide that as a lender, you’re going to get left behind. I see this as a new phenomenon. Borrowers are evolving with new technology and that’s something that is never going to change.”
Another way that lenders are growing their business these days, aside from incorporating new technology and reaching out to borrowers more, is by acquiring new branches. “We are seeing a fair amount of growth coming through branch acquisition, and actually technology can play a major role in helping the lender the battle for those branches, “part of that is that the technology can help you win that battle for those branches, there’s a lot of that going on out there for branches.,” reported Brian D. Lynch is the Founder and President of Irvine, Calif. -based Advantage Systems, a provider of accounting and contract management tools for the mortgage banking and real estate development industries. In this position Lynch is responsible for managing the company’s day-to-day operations, and guiding the company’s strategic direction.
“With technology you can put real power in the hands of the branch person, and that’s attractive to them,” continued Lynch. “A lender can offer things like Web-based reporting, which might make the difference in terms of that lender’s ability to get that branch’s attention. There’s a lot of competition for good acquisitions today, so lenders have to stand out.”
From a lender’s point of view, growing in this market comes down to competitiveness, according to Dan Jones, Vice President of Technology for Churchill Mortgage Corporation, where he manages their enterprise technology infrastructure, operating platform, programming and web initiatives. Based in Brentwood, Tenn., Churchill Mortgage is a prominent and financially sound leader in the mortgage industry, providing conventional, FHA, VA and USDA residential mortgages across 30 states.
“I think competitiveness sums it up,” he says. “You can attribute growth to multiple things, whether it’s competitiveness to bring new people on board or competitiveness to retain your top performers, whether it’s your business and your market share, whether it’s bringing new customers on board or retaining customers, it’s really all the same in the end. Unfortunately sometimes it’s the pretty things that people latch on to, so we ask distracting questions like: Is my app prettier than your app? Is my website prettier than your website? So, as we as lenders move or don’t move to new technologies, a lot of times it comes down to training our people to use these new tools effectively. If you don’t get your people excited to use the technology to get that competitive spirit going there will always be another lender out there ready to pay that staff member more money and offer them a prettier technology to work with.
“The bottom line is that if lenders want to grow, they have to figure out how to enable their folks to engage better, whether it’s figuring out how to enable customers to do business with us better, whether it’s how to enable our operations staff to work more efficiently, that’s the key. The successful lender should always be looking for new ways to enable its business to get better across the board. Don’t be content to stay as you are today. That just won’t work,” Jones concluded.
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