Attracting New Borrowers

I recently attended a number of meetings in San Diego at the Mortgage Bankers Annual Convention. What struck me were lenders’ understanding, or should I say, misunderstanding of marketing automation. When asked if they used marketing automation to drive new business to the point of sale most responded by saying “yes, we already have a CRM solution, or we do some email marketing and social media.” Isn’t that what marketing automation is? The answer is a resounding NO.

So what is marketing automation?

Marketing automation refers to software platforms and technologies designed for marketing departments and organizations to more effectively market on multiple channels online (such as email, social media, websites, etc.) and automate repetitive tasks.

Featured Sponsors:

[huge_it_gallery id=”2″]

“At its best, marketing automation is software and tactics that allow companies to buy and sell like Amazon – that is, to nurture prospects with highly personalized, useful content that helps convert prospects to customers and turn customers into delighted customers. This type of marketing automation typically generates significant new revenue for companies, and provides an excellent return on the investment required.” Hupspot.

Why is Marketing Automation important to lenders?

In order to survive and thrive in this mortgage environment of constantly changing rules and regulations, heightened competition for borrowers and extreme pressure to produce results, you must realize the need to identify high quality business opportunities. It is critical to identify leads quickly and efficiently and then drive them to the point-of-sale with compliant communications for converting them into borrowers. It’s equally important to retain these borrowers and to maximize their on-going value through repeat business and referrals.

Engaging these prospective borrowers in real time across a multitude of channels such as the Internet, email, social media, print, video, and mobile devices highlights the importance of working with a proven mortgage specific marketing automation solution that can bring out the best in your marketing while easing your compliance burden.

Featured Sponsors:

[huge_it_gallery id=”3″]

This requires a proven enterprise-wide marketing automation solution that supports you and your specific initiatives to address these market conditions. Each person in your organization that is involved with driving growth is empowered to focus on what they do best. For example, Loan Officers are free to close more loans, instead of trying to create marketing materials. C-level executives are presented with sophisticated, yet easy-to-use tools for more effective oversight and management, while marketing managers can demonstrate their marketing genius and compliantly maintain brand consistency across the organization.

Just having a CRM solution (electronic rolodex) or emailing some general marketing messages, and posting on social media every once in a while is not marketing automation. More importantly, it will not consistently and compliantly drive new business to the point of sale. So if you are serious about growing your lending business, it is critical to understand what mortgage specific marketing automation can do for you.

About The Author

[author_bio]

Compliance’s Impact On Property Preservation

National and local compliance regulations and laws have changed the way property preservation field service companies now do business. Although such laws and regulations were in large part enacted in the past few years following the mortgage crisis to protect the consumer, some appear to have been written by legislators or officials who were not all that familiar with the field services industry and the benefits it provides. Although good intentions may have existed, these measures have created more confusion, delay, and increased the cost of maintaining vacant properties that are in loan default or foreclosure.

Featured Sponsors:

[huge_it_gallery id=”2″]

Compliance is very costly and time consuming, yet the fees paid to preservation companies by lenders and loan servicers, and those fees allowed by the GSE’s, have not increased proportionately (or at all) to help offset the compliance costs. Company personnel and resources previously used to conduct business and provide service to clients, are now dedicated to answering lengthy and detailed compliance questionnaires, producing documents for client audits, and working on compliance policies and procedures. Significant time is now spent in on-site audits with lender and loan servicer clients, and they are also required to conduct audits of their own third party contractors. Although the larger preservation companies may be able to absorb the cost of hiring additional employees and professionals to handle compliance requirements, smaller contractors cannot and have been forced to leave the industry.

Compliance is not all negative and does have certain benefits. It has forced preservation companies to pay more attention to protecting the consumer, evaluate and put existing policies and procedures in writing, and also create new policies and procedures in response to client and governmental agency requirements. Preservation companies have had to create and staff in house compliance and legal departments, and devote more time and attention to evaluating 3rd party risk, and oversight of 3rd party contractors and relationships. Many preservation companies also have to impose the same compliance requirements on their contractors that their clients impose on them; although many times this is not realistic or affordable. So adjustments are necessary on a case by case basis, depending on what type of service the contractor provides, the risk involved (i.e. grass cut v. exterior inspection v. securing), volume of work provided, and the size of the contractor.

Featured Sponsors:

[huge_it_gallery id=”3″]

Preservation companies, although generally not directly involved with the consumer or their private information, must still be proactive and cognizant of regulations and compliance requirements, including those of the CFPB and FDCPA. Paramount in all compliance is proper consumer treatment and protecting their private and confidential information from disclosure to 3rd parties.

There are numerous laws, ordinances, and regulations that have been enacted by states and municipalities in an attempt to stem the tide of unsightly neighborhood properties and blight. Registering vacant properties and having to post cash bonds, providing advance notice before securing a property or commencing preservation work, licensing of inspectors, local point of contact, court determination of abandonment, and having to coordinate interior inspections with the borrower during the redemption period, are just a few of the measures enacted. Although enacted with good intentions, these laws and ordinances have caused additional delays and increased the costs of preserving and protecting properties.

The preservation industry has changed significantly. A few years ago, the general public had no idea who they were or what they did. Today, the industry is on everyone’s radar, including plaintiff lawyers, state and federal attorney generals, and other enforcement and prosecutorial agencies. It is now more important than ever that the industry strives to be compliant and to work together with (not against) government officials to keep properties maintained, preserve value, and prevent blight.

About The Author

[author_bio]

They Always Have Something To Say

The Presidential race of 2016 is off and running and while home financing does not have the same impact that it had in the two previous campaigns, there is still some focus on the underlying cause of the crisis and what government should be doing to prevent another one. And while there is not much overtly said about creating more opportunities for homeownership, there are directives and actions taking place that indicate that government policy is still thinking in that direction.

Of course we know that any politician worth their salt will have something to say on everything and while the focus has been on foreign policy and immigration, the candidates have been fairly vocal when it comes to monetary policy, government oversight and assigning blame for the financial crises. Yet in their effort to win votes and influence people they sometimes say the most outlandish and inaccurate things. Here are just some examples from both the Republican and Democratic candidates.

Featured Sponsors:

[huge_it_gallery id=”2″]

Marco Rubio: On January 10th Mr. Rubio declared that “…banks and other firms crave being declared too big to fail.” He went on to say that “We have created a category of systemically important institutions and these banks go around bragging about it.”   The reality is that no one is bragging and in fact regional and mid-size banks are pressing Congress to actually raise the threshold currently considered as the entryway for a “too big to fail” classification.

Jeb Bush: In the same debate Mr. Bush claimed that the Dodd-Frank Act had lowered capital requirements on the big banks. He stated that “What we ought to do is raise the capital requirements so banks aren’t too big to fail. Dodd-Frank has actually done the opposite, where banks now have higher concentrations of risk in assets and the capital requirements aren’t high enough.”   Unfortunately for Mr. Bush he was just plain wrong. As every banker knows the Basel III Accord requires all banks to have higher capital requirements and the Federal Reserve Board added a capital surcharge between 1% and 2.5% to the most complex banks.

Featured Sponsors:

[huge_it_gallery id=”3″]

Ted Cruz: The senator from Texas went further when he claimed that the Feds monetary policies and actions in the 2000s directly caused the crisis. According to the FCIC report the causes of the crisis were determined to be a breakdown in corporate governance, firms willingly taking on too much risk and a mix of excessive borrowing by households and investors.   Unfortunately, Mr. Cruz obviously failed to read the report himself.

Bernie Sanders: In numerous statements made by Mr. Sanders the weakening of the Glass-Stegall Act was the true cause of the crisis. According to him the diluting of this act allowed shadow banks (such as Lehman and AIG) to gamble recklessly with the money that came from the federally insured commercial banks. However, two Yale professors quoted in American Banker stated. “…Bear Sterns…and Lehman…and Merrill Lynch and…Morgan Stanley all managed to get enough funding to be systemically dangerous without the deposit bases, in ways that would have been consistent with Glass-Stegall.”

Hillary Clinton: Of course Mrs. Clinton cannot be left out of this listing of misstatements. In October of 2015 when she announced her plan to “rein in Wall Street” she accused President Bush’s administration of basically ignoring the accumulation of risk and pointed a finger at regulators in Washington who “would not or could not” keep up. Her point of reference was a picture taken of regulators taking a chainsaw to banking regulations. Unfortunately, she failed to acknowledge that this picture was actually part of an initiative by regulators to ease outdated regulations for Community Banks.

There are of course other housing policy issues that do not make the regular debate circles but are still active in government circles. One of these of course is Fair Housing and expanding homeownership. Despite the failure to be part of an active candidate dialogue these issues are still a focus within the government housing community. For example, the FHFA recently announced that they have directed Fannie Mae and Freddie Mac to evaluate why some consumers are unable to obtain a mortgage and to make changes where required to ensure the availability of mortgage financing. The CFPB, while currently focusing on LO compensation is still working or changes to the HMDA data to be collected and how the resulting information will be used to address Fair Lending problems. From my perspective it would be beneficial if these same issues and related regulation would be something that the candidates discussed before November rolls around.

About The Author

[author_bio]

Veros Releases Housing Forecast

Veros released its most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2016.

Featured Sponsors:

[huge_it_gallery id=”2″]

The VeroFORECAST report indicates residential market values will continue their overall upward trend during the next 12 months, with overall annual appreciation rising to +4.4% (from its Q3-2015 forecast of +3.6%) with 94% of markets forecast to appreciate. “Our current VeroFORECAST update continues to show increasing strength for the next year and above last quarter’s update,” says Eric Fox, VP of Statistical and Economic Modeling at Veros.

TLI1115-Chart-one

“However in the 13 to 24 month forecast window, we expect the rate of appreciation to slow down with this forecast period expecting only +2.3% appreciation. The primary driver for this weakening can be attributed to tightening already begun by the Fed which is likely to cause mortgage interest rates to begin ticking upward. We don’t see dramatic increases in interest rates or a repeat of 2007 price declines. At this point, it simply looks like a slowing of the increase in house prices as we get into well into 2016 and 2017.”

Featured Sponsors:

[huge_it_gallery id=”3″]

“The top forecast markets are all showing appreciation in the 10% range with the Pacific Northwest getting very hot,” continues Fox. “Portland, Seattle, and Bend are numbers 1, 2, and 4 in the nation, respectively. Denver and San Francisco continue to be strong as well rounding out the Top 5. Most of these markets have strong economies, growing populations, and month’s supply of homes around 2.0 months or less. With these conditions, it is difficult for these markets to do anything other than appreciate at a good clip. Oregon, Washington, and North Carolina showed the biggest gains in one-year forecast levels from last quarter’s update. Top performing markets continue to confine themselves to California, Colorado, Florida, Washington, and Oregon which comprise 21 of the Top 25 forecast markets.”

TLI1115-Chart-two

The forecast bottom markets are expected to be in the eastern portion of the U.S. New Jersey, Connecticut, parts of New York, West Virginia, Alabama, and parts of Pennsylvania account for well over half of the bottom 25 markets. However even these expected poorest performing of markets are only expected to depreciate slightly or be flat.

Lenders Need To Get This Right

Too often lenders worry more about the process and not enough about their customer. Good lenders offer great customer service. For example, United Wholesale Mortgage (UWM), the country’s No. 1 wholesale mortgage lender, has announced the creation of its Pronto team, a solutions-focused super-helpdesk aimed at providing the fastest and most streamlined client service in the industry.

Featured Sponsors:

[huge_it_gallery id=”2″]

“Delivering exceptional client service is the backbone of our company,” said Mat Ishbia, president and CEO of UWM. “We are confident that our Pronto Team will set the gold standard for service industrywide.”

Pronto is a client service supergroup that is staffed with experts in every mortgage discipline to support UWM’s front line teams of account executives and underwriters. Comprised of experts in underwriting, closing, secondary marketing, AUS and closing, Pronto is on-call for brokers when additional help is needed in any facet of the loan process.

Featured Sponsors:

[huge_it_gallery id=”3″]

UWM has launched a multimedia “We Have Pronto” campaign to illustrate Pronto and the major advantages it offers its nationwide network of independent mortgage brokers. In a recently released video, UWM compares the make-up of its Pronto team to a Rock n’ Roll Supergroup “where they’ve taken the best musicians from the greatest bands and put them together on one stage.”

Pronto gives brokers access to constant support and ensures that clients’ tough questions get answered, tricky circumstances get resolved, and high expectations are met in a timely manner.

About The Author

[author_bio]

Increasing Speed And Efficiency

Servicers, non-bank servicers, investors and private capital groups are all struggling to reimagine the way they process insurance claims. There is a need for speed and quality with the caveat to be cost effective. As a result, many of these organizations are looking to outsource their needs to specialized vendors.

Featured Sponsors:

[huge_it_gallery id=”2″]

By using a service-oriented business model, vendors are able to accomplish a faster processing timeline at a lower cost than mortgage servicers, which pleads the case that servicers should look to experienced vendors with knowledgeable, industry seasoned staff. Not only do vendors understand the intricacies of processing various claims, but they have the skills to handle a diverse range of customers and their evolving needs. In addition, vendors can build on a service-oriented model by forming partnerships with property preservation companies and major insurance carriers to streamline the claims management process.

In order to process claims faster than the industry norm, a vendor must incorporate data-specialized, Federal Housing Administration (FHA) reporting into their timeline management. This reporting allows vendors to reduce expenses for customers while ensuring that investor obligations are fulfilled. The focus should always be on the largest recovery possible while maintaining insurer standards and investor/servicer timelines.

Featured Sponsors:

[huge_it_gallery id=”3″]

The filing of claims can be streamlined and improved with the use of innovative technology to automate the process. There is now technology available that is capable of client specified reporting and other various communications options for customers. As we continue to move in a direction where problems are solved at the click of a mouse, it is vital that vendors embrace and utilize the evolution of automation. Technology will improve the client-vendor interface to be more interactive, streamlining communications as well as allowing vendors to trigger recoverable depreciation claims on FHA properties.

A never changing paradigm in the industry is that of compliance, which is especially important when looking for new ways to speed up processes and save customers money. The risk mitigation component of the claims process is too often overlooked by all parties. Whether it is the Office of the Comptroller of the Currency (OCC), Consumer Financial Protection Bureau (CFPB) or another regulatory body, compliance now requires teamwork between servicers and vendors. By proactively preparing for audits, companies can shorten the actual audit process, therefore saving both time and money for themselves and their clients. It is imperative that both vendors and servicers understand new regulations as they are released, so as to address them preemptively before they become an audit finding.

As servicers choose among various vendors for the processing of insurance claims, it is important that they make informed decisions based on the right fit for their needs. The vendor that improves the claims filing process by increasing speed and decreasing cost is one that uses a service-oriented approach, innovative technology and compliance expertise. When a servicer selects a vendor with these tools, they gain the ability to work effectively with their vendor and will receive the most optimal results.

About The Author

[author_bio]

Don’t Ignore Gen X And Baby Boomers

As the mortgage industry forges ahead into a New Year, lenders are under immense pressures to remain profitable. Winter months are typically slow, making it even more critical for the industry to look beyond Millennials – the largest generation in history at just over 83 million, but one that still faces significant challenges that could prevent many from purchasing homes within the next several years. For example, record-high student loan debt is making it difficult for Millennials to save for a down payment. Even more concerning for this group’s future is that seriously delinquent education loans have increased more than 11 percent of the $1.19 trillion, likely due to a struggling (although recovering) job market.

Featured Sponsors:

[huge_it_gallery id=”2″]

To succeed in this environment, lenders should consider revamping their initiatives and focus more attention on other buying segments, including Gen X and Baby Boomers.

Gen X & Baby Boomers the key to profitability

While Millennials have monopolized much of lenders’ attention in recent years, Gen X (those ages 35-50) is proving to be the most stable generation. While a much smaller group, the National Association of Realtors (NAR) recently reported that Gen X is the largest home-selling demographic at 27 percent and with a medium income of just under $105,000. Additionally, this group is in the market for larger homes as they grow their families, making them an ideal target market.

Baby Boomers are also a market segment that should not be ignored. While the net worth of this generation is about half what it should be if the recession had never occurred, Baby Boomers still have, on average, more than $200,000 in home equity. Additionally, as this group retires and moves into smaller and less-expensive homes, many are looking to free up that equity. According to NAR, 81 percent of younger Baby Boomers (ages 50 to 59) are buying single family homes, and nearly 60 percent of Baby Boomers age 60 and older are purchasing single-family homes in senior-related housing communities. In fact, Baby Boomers are expected to spend $1.9 trillion or more on home purchases over the next five years.

Featured Sponsors:

[huge_it_gallery id=”3″]

Appealing to everyone…not just Millennials

While Millennials appear to be the market to go after, industry reports clearly show that Gen X and Baby Boomers are also viable market segments to increase growth – especially while Millennials overcome challenges related to student loan debt and a still-recovering job market. But to do so, lenders must implement innovative technology and new processes that appeal to all generations, and that speed underwriting and expedite document collection to further strengthen customer service.

Lenders must also recognize that each generation expects a customized experience. They expect to interact with them the way they want. For example, Millennials, the most tech-savvy generation in history, may prefer digital services and online communication or texts. Gen X, also tech-savvy, may have similar expectations but also want the option of in-person interactions with their lender. For Baby Boomers, traditional communication will likely be the method of choice.

In response, lenders must operate with a customer-centric approach that appeals to everyone – not just one market segment. This may include online portals that allow borrowers to more easily access loan documents as well as view real-time progress. Additionally, lenders should take advantage of modern technology to enable borrowers to electronically sign important loan documents. Not only can this significantly speed the process and streamline operations, but also result in excellent customer satisfaction rates.

While Millennials seem like a promising market segment, the wisest lenders will look beyond this generation to remain profitable in 2016. Millennials will continue to face challenges over the next several years, while Gen X and Baby Boomers present opportunities that lenders simply cannot ignore.

About The Author

[author_bio]

Here’s What Matters

Kevin Brungardt, Chairman and CEO of RoundPoint Mortgage Servicing Corporation (RoundPoint), one of the nation’s largest mortgage servicing companies, released a statement today related to a recent report by Inside the CFPB that consumer complaints lodged with the Consumer Financial Protection Bureau (CFPB) fell during the fourth quarter, in some cases by double digits.

Featured Sponsors:

[huge_it_gallery id=”2″]
“Obviously, this is good news, both for consumers and the industry, but it cannot be an excuse for lenders or servicers to lessen their efforts to provide an excellent customer experience,” Brungardt said. “We would like to believe that the drop in complaints is the result of an industry coming to grips with the new regulatory demands, but there are many other contributing factors that have almost certainly played a role.”
According to a story by Thomas Ressler of IMF Pubs, consumer complaints about the application or origination process fell by nearly 26%, with consumer disputes of a company’s response to a complaint dropping by more than 45%. Consumer problems with loan modifications fell by nearly 24% and servicing complaints fell by more than 23%.

Featured Sponsors:

[huge_it_gallery id=”3″]

“Fewer consumer complaints is always good,” Brungardt said. “While this data is very interesting, American consumers are traditionally very distracted during the holidays and may find less time to complain about our industry online. In addition, Fannie Mae and Freddie Mac typically have moratoriums on foreclosures during the holidays, which could serve to further reduce online complaints. The real test of consumer attitudes toward our industry will be evident in the trends we see over the remainder of the year.”

RoundPoint is a fully-licensed Agency and Non-Agency subservicer for commercial banks, credit unions, mortgage companies and hedge funds. RoundPoint currently services over $60 billion worth of mortgage assets, some of which it owns but the majority of which is subservices for loan originations nationwide. The firm provides a superior suite of end-to-end services, including loan boarding, escrow administration, cashiering, investor reporting, member services, and default management. Its leadership team works directly with investors to design a customized servicing approach that provides the best possible outcomes for borrowers.

About The Author

[author_bio]

It’s Time For You To Lead

Everyone is looking for that secret sauce to grow your business. However, sometimes there is no secret sauce at all. Sometimes it’s all up to you.

Featured Sponsors:

[huge_it_gallery id=”2″]

Lolly Daskal wrote an article entitled, “Why the First and Most Important Person You Need to Lead Is Yourself” that makes so much sense. She said that every business needs a leader who can cultivate a compelling vision, define a strategic plan, develop change management, lead employees, and inspire commitment among his or her people.

Featured Sponsors:

[huge_it_gallery id=”3″]

Put another way: You must know who you are as a leader before you can lead others.

Here are nine skills to sharpen if you want to be a successful leader:

  1. Cultivate your self-awareness.

Self-knowledge is the beginning of self-improvement. Successful leaders don’t only run an organization—they also lead people. It’s paramount that you know yourself well, because when you know yourself, you are empowered; when you accept yourself, you are invincible.

  1. Develop the right mindset.

Develop your mindset. Start each day with a decision to be happy. Embrace the positives and let go of all the frustrations and past failures that can distract you. When you master your mindset, you free yourself to achieve the level of success you are capable of, because as Henry Ford said, “Whether you think you can, or think you can’t, you’re right.”

  1. Capitalize on your confidence.

Successful leaders capitalize on their confidence when difficulties arise. Don’t allow your insecurities to get the best of you. Remember that your confidence is like a muscle—the more you use it, the stronger it gets.

  1. Continue to learn.  

Try to learn something new every day. Read newspapers, books, magazines, and online articles. Search for what is innovative and creative, and try to intersect what is new to what you are already doing. The most skillful leaders never stop being a student.

  1. Teach to grow.

Don’t hoard your knowledge but share it: with your team, with your colleagues, with your clients. The more you teach as a leader, the more you grow. When you learn, teach; when you get, give.

  1. You are the results of your experiences.

One of the hardest things to do is to learn from your mistakes, but even the most successful leaders have made mistakes they don’t want to repeat. Document your experiences and ask yourself what you could do better next time. Reference back often so you don’t repeat patterns. You can learn something from everything you do, good or bad. The only source of knowledge is experience.

  1. Success is a series of small wins.

It can be hard to build momentum, so start with small wins. The best way to have a sustained success all year is to secure small wins, because small wins, small differences, often make a huge difference.

  1. Action speaks louder than words.

To be a successful leader, you have to be out there—you have to hit the ground running, taking action, taking risks. If not, you will find yourself growing stagnant and stale. If you wait until you are ready, you may be waiting for the rest of your career.

  1. Find the balance.

Last, but definitely not least, learn to take care of yourself. Keep a balance. Eat healthy foods and exercise each day, even if it’s just a brisk walk. Make time for the people and things you love outside of work.

You can make this your year, but it takes skillful leadership to make it happen. It all starts with you–with knowing yourself, learning daily, and sharing that knowledge with others. Then when the difficult days come, and they will, you will be prepared.

About The Author

[author_bio]