The Educated Customer Complains Less

Companies across America spend billions of dollars a year to gain an edge to separate themselves from the pack. This includes creating marketing campaigns driven by seasonality, monitoring forecasted changes in trends and using information from data research to remain competitive. In a time where data and social media rule, now more than ever, we must be vigilant with the public’s perception of our brand and company. Reviewing the Consumer Complaint Database, managed by the Consumer Financial Protection Bureau (CFPB), can provide a company with insights into what is important. Companies that review this database periodically, make adjustments, and take the time to educate consumers will have the upper hand on competition and possibly reduce any complaints.

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The database tracks and monitors consumer complaints related to banks, lenders and other financial institutions to ensure fair treatment for all consumers. Complaints logged at are reviewed and routed to the financial institutions on consumers’ behalf. Companies are given time to work with the consumer and respond to the complaint (often within 15 days). The final step of the process is to publish complaint-related information to the database giving the customer an opportunity to provide feedback, if desired.

These complaints yield valuable insights into consumer behavior and their understanding of our industry’s products and services. Even if a company does not receive multiple complaints, there are still lessons within the data. Here are a couple of examples:

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FACT: 93 percent of all mortgage-related consumer complaints are NOT resolved in favor of the customer.

INSIGHT: The consumer may perceive the lender in a negative light despite not doing anything wrong, un-ethical or with malice.

FACT: Upwards of 90 percent of the complaints are closed with an explanation.

INSIGHT: Improved communication between lenders and customers may lead to a better understanding of mortgage products and services, which in turn will lower the number of complaints considerably.

Tech companies often speak of usability and user experience, especially when referring to websites and apps. When a user tells you they struggled to navigate your site or struggled to find the one thing that took them to your site in the first place, it is important to listen and to see if there is a theme. If someone does not understand what you do, what you sell or why you do it, they often will not buy from you. In fact, you risk losing the customer permanently.

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There is a lesson that mortgage companies can learn from this information that can help them improve their business practices. Escrow accounts, property taxes and mortgages are not simple and are not easily understood by most consumers. With complex federal, state, county and city specific regulations undermining the ability to understand exactly how property taxes are calculated, it is understandable why consumers are confused. Consumer confusion and consumer perception may well be the same thing. If they are confused or frustrated with your product and/or services, their perception of the company will no doubt be negatively affected.

In the beginning of the second quarter of 2017, the CFPB expanded the number of issues tracked from six to 18 under the mortgage product type within the complaints database. With this increased delineation of issues, we will have the ability to see more accurate trends within the industry.

At the beginning of the fourth quarter of 2017, the leading mortgage complaints were payment processing issues, struggles to pay mortgage/loan servicing and escrow account issues. These collectively account for 66 percent of all mortgage-related complaints in 2017.

Though credit reporting and debt collection complaints have soared to the top of the list in 2017, mortgage related complaints still represent a large portion of all complaints logged in 2017.

Effectively addressing the concerns of consumers and educating them on mortgage related issues is no longer an option. It can mean the difference between an educated consumer and a host of consumer complaints.

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We’re In A Pivotal Moment In Housing, What Are You Doing About It?

After nearly a decade of deliberate downward trends, interest rates are now put on an upward trajectory, with 30-year fixed now at a 4-year high. A decade long housing recovery is now putting many markets in an affordability crisis, one in which wage growth, even in this healthy economy, cannot keep pace with home price growth. Amid record-breaking report after report of high home prices, we have declining trends in home sales volume, indicating that while those who are willing to pay the possibly overvalued prices push up the median home price figures, those who are not stay on the sidelines and bring down closing volume.

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The Fed is planning another three to four rate hikes this year. Median home prices are now in the 20 to 30 percent above pre-bubble peak of the last housing correction in many top markets. Bubble talks are getting more rampant, including by renowned money manager James Stack, who predicted the last one.

We’re no doubt in a pivotal moment in housing. Are you watching it erupt in slow motion, or are you doing something about it?

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So far, many of your peers seem to be taking the do-nothing route and carrying on business as usual, except for the part of likely making less money. As fewer Americans buy homes, and among the ones who do get more self-reliant and shop for the lowest points and rates, mortgage lenders’ profit margins have continued to narrow. As Wolf Richter, CEO of Wolf Street Corp., puts it: The mortgage industry is going through all kinds of headaches.

But there is a quiet revolution brewing. Recently, a mortgage leader in the western region that focuses on many scorching-hot markets, such as Seattle, Portland and Las Vegas, began offering mortgages with down payment protection. The new offering is positioned as ”mortgage plus,” a better and smarter loan for more informed and savvier homebuyers. With a mortgage including down payment protection, loan officers and realtors now have a solution for cold-feet buyers who worry about buying at what could likely be the top of a typically seven to 10 year real estate value fluctuation cycle. Even if these buyers are buying high, if they sell later at a loss after an expected correction, their loss in their down payment is reimbursed *. Refinance borrowers have a similar option, in equity protection. They can essentially lock in the appraised value of the home at market high when they refinance, when they sell later at a loss after a downturn, their loss in equity can be reimbursed. Pacific Union Financial and First Heritage Mortgage – also operating in states with overheated home prices – are among other proactive lenders offering the same new“mortgage plus” products.

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Notice that mostly non-bank lenders are taking the bull by the horns (pun not intended) to carve a new point of differentiation for themselves and a new profit revenue stream. This is perhaps one of the few bright spots in the mortgage industry which is struggling with negative perceptions and downward profit trends. Big-bank lenders’ market shares and margins have continued to decline, while more nimble non-bank lenders are taking the lion share of the mortgage market. It is not a surprise that these lenders represent the only growing segment.

A healthy economy has also propelled a record-breaking stock market, on a parallel ascent so far with the housing market. Earlier this week, Goldman Sachs warned there is a “high probability” a stock market correction will happen in the coming months. Goldman Sachs and other oracles of the housing bubble may be crafty with their timing; after all, it’s safe to call for a correction in almost anything after a long bull run. Even if they were all wrong, as their bubble alarms get louder, now is the time to consider what consumers will do and most importantly, what will you do in order to survive the next downturn.

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Getting Your Team To Succeed

No one person makes a business successful. It takes a team. However, you have to encourage that team to work as hard as possible to ensure the company’s overall success.

How do you do that? In the article entitled “5 Ways to Motivate Your Team” by Jon Gordon, he says you won’t find Motivation 101 in most business schools; yet, the ability to motivate one’s team and organization is one of the most important skill you must possess today.

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Now, more than ever, a leader and manager’s job is to motivate and rally his or her team through challenging times. You can’t outsource motivation. It is the leader and manager who must motivate. That’s why I often say motivational speeches don’t work but leaders who motivate do.

Many leaders want to take the emotion out of business but that is a huge mistake. When fear and negativity are the primary emotions people in your organization are feeling, you have to counter that with an even more powerful emotion, like faith, belief, and optimism. And your success in that depends on your ability to motivate. In this spirit here are five strategies to motivate your team to get the results you want.

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1.) Don’t be too busy to communicate. Uncertainty breeds negativity if there is a void in communication. Unless managers and leaders fill this void with clear and positive communication, people will assume the worst and act accordingly. Don’t let your busy schedule get in the way of taking the time to talk with your team.

2.) Lead with optimism. The engine for America’s growth and prosperity has always been its can-do attitude and spirit. Unfortunately, in the past few years optimism has been in short supply. The most important weapon against pessimism is to transfer your optimism and vision to others. Leadership is a transfer of believe and your belief inspires others to think and act in ways that drive results.

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3.) Share the vision. It’s not enough to just be optimistic. You must give your team and organization something to be optimistic about. Talk about where you have been, where you are, and where you are going. Share your plan for a brighter and better future, talk about the actions you must take, and constantly reiterate the reasons why you will be successful. Create a vision statement that inspires and rallies your team and organization. Not a page-long vision statement filled with buzzwords, but a rallying cry that means something to the people who invest a majority of their day working for you. This vision statement can’t just exist on a piece of paper. It must come to life in the hearts and minds of your team So it’s up to you to share it, reinforce it, and inspire your people to live and breathe it every day. A positive vision for the future leads to powerful actions today.

4.) Relationships build real motivation. It’s much easier to motivate someone if you know them and they know you. After all, if you don’t take the time to get to know the people who are working for you, then how can you ever truly know the best way to lead, coach, and motivate them effectively?

5.) Create purpose-driven goals. Real motivation is driven by purpose and a desire to make a difference. When people feel as though the work they do is playing an integral role in the overall success of the team and organization and the world, they are motivated to work harder. Great teams don’t work for a paycheck. They work for each other and a bigger purpose.

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United Wholesale Mortgage Exclusively Offering Conventional High-Balance Loans Nationwide

United Wholesale Mortgage (UWM) is now exclusively offering Conventional High Balance loans nationwide, making a more cost-effective loan product available to borrowers in counties and states that previously did not have access to high-balance loans.

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“The roll-out of High Balance Nationwide opens up a huge business opportunity for mortgage brokers throughout America,” said Mat Ishbia, President and CEO of United Wholesale Mortgage. “This is a win-win for consumers and our mortgage broker network, and we are excited for this product to make a big difference to our broker partners and many of their consumers in 2018 and beyond.”

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Currently, only 7% of U.S. counties (220 out of 3,234) have access to loan amounts over $453,100, through FHFA Conforming loan limits, and up to $679,650. If a home does not reside in one of those 220 counties, the only program option is a true Jumbo loan. Jumbo loans notoriously comes with higher fees, tedious guideline requirements and stringent overlays.

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UWM is solving this problem by offering its broker network a Conventional High Balance loan program in 100% of U.S. counties. This program gives consumers access to a $679,650 loan amount, great rates, a streamlined underwriting process, and the accessibility of a $849,570 purchase price with a 20% down payment.

Highlights of the High-Balance Nationwide include:

>>680 Minimum FICO

>>43% Debt to Income

>>80% LTV

>>Primary and Second Homes

>>Lower rates, more flexible guidelines and fewer requirements than Jumbo

>>Fast turn times, averaging 15 days or less from submission to closing

“Jumbo loans are very competitive in our area, and we are in a county that High Balance is not available, so often we lose business to big banks as a result,” said Brodie Calder, President of Beam Lending in Layton, Utah. “Now we are able to offer a fast and easy competitive loan with a great rate that will not only be beneficial to growing our business, but it will also be a better loan option for our clients.”

This product is another example of UWM’s continued commitment to offer its network of mortgage brokers access to exclusive programs and products to grow their business. It comes less than three weeks after UWM announced that it lowered its minimum FICO requirements for Elite FHA and VA to 640, and down to 620 for all other FHA and VA loans. Additionally, UWM announced last week that it had made virtual e-closing capability available on all Conventional Purchases and Refinances in 16 states.

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Borrower Satisfaction Is Critical

The mortgage industry’s promise of technology creating a faster and easier mortgage origination process does not appear to be fully recognized, as mortgage customers are reporting slower purchase processes. That’s according to the J.D. Power 2017 U.S. Primary Mortgage Origination Satisfaction Study,SM  which finds that overall satisfaction with mortgage originators has declined this year, due in part to a perception of a slower process, despite a significant increase in the number of customers applying online.

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“We’re at a critical inflection point in the mortgage industry where new technology and the growing use of digital mortgage application channels has made it possible for the origination process to move more quickly; however, the customer is still the final judge of speed and quality,” said Craig Martin, Director of the Mortgage Practice at J.D. Power. “A critical element of satisfaction is setting expectations, and this tends to be a weakness of technology, which is demonstrated by substantially lower satisfaction among customers who do not work with a human to complete their application.”

Following are some key findings of the study:

>>Overall satisfaction declines as purchase process slows: Overall satisfaction with primary mortgage originators is down 8 points (on a 1,000-point scale) in 2017. This is driven in part by reports of longer times from initial application to closing. On average, the purchasing process took 36 days this year, an increase of almost a week from 2016.

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>>Digital use surges but not digital satisfaction: For the first time in the study’s history, both refinance and purchase customers cite online/website as the most frequent method of submitting a mortgage application. A total of 43% of mortgage customers indicate applying digitally in 2017, up from just 28% in 2016. Satisfaction among customers applying online/via website has declined by 18 points year over year and trails satisfaction with in-person applications by 10 points this year.

The Lodasoft Digital Mortgage Platform provides loan officers with complete loan visibility, accountability, and transparency in one easy to use digital mortgage solution. In addition, the solution acts as a 24-hour virtual assistant providing one point of access for system driven communication, gathering of documents, automated lead generation, in-process status updates and post-closing follow-up.

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Our intelligent digital loan manufacturing workflow helps lenders automatically identify and complete rudimentary tasks throughout the enterprises lending lifecycle, streamlining the origination process to assist is closing loans faster. Our digital mortgage platform offers mortgage lenders the ability to further simplify their origination and closing process while keeping borrowers, realtors, and all other interested parties involved every step of the way.

The Lodasoft difference is in focusing on the loan, manufacturing it in as little time, with as little errors as possible, while communicating every step of the way. When implementing Lodasoft, lenders can take a traditional pipeline-driven model (file by file) and move to a prioritized task-driven model while automating communication simultaneously.

By focusing on the loan, lenders are able to identify all of the mini-bottlenecks from lead to prequalification to in-process, closing, post-closing and beyond. The borrower will see the benefits of more transparency and faster processing. As a result of simultaneously automating communication along the way, all interested parties have a new sense of involvement creating much deeper relationships further driving greater borrower satisfaction.

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VeroFORECAST Reveals A Record Breaker

Veros Real Estate Solutions (Veros) reports that residential market values will continue their overall upward trends during the next 12 months, with overall annual forecast appreciation of +4.2%, which is higher than last quarter’s forecast appreciation of +4.0%. And, only 3% of markets are expected to depreciate which is the same as last quarter’s forecast.

This insight comes from the company’s most recent VeroFORECAST, a quarterly national real estate market forecast for the 12-month period ending December 1, 2018.

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“Our Q4 VeroFORECAST is continuing to show the market as very strong for the overall U.S. residential real estate market,” says Eric Fox, VP of Statistical and Economic Modeling at Veros. “Washington State is set to boom– occupying all of the Top 5 market spots. This has never happened before with one state occupying all of the top positions. Seattle is #1 with expected appreciation of over 12% followed by other Washington markets of Bellingham, Bremerton, Kennewick, and Mount Vernon all near 10%. These markets show no signs of letting up as supply of homes is exceedingly low and population continues to grow.”

Fox continues, “Metro areas in Colorado, Idaho, Oregon, and Washington comprise the remaining metro areas in the Top 10. If you want strong appreciation, move to the Northwest portion of the U.S. “

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Conversely, 12 of the bottom 25 markets are in the Northeastern states of Connecticut, New Jersey, Maine, West Virginia, Maryland, Pennsylvania, and New York. Bangor, Maine is forecast to be the worst performing market with 2.0% depreciation with the markets of Bridgeport, Longview, Vineland, and Atlantic City forecast to have approximately 1.0% depreciation over the coming year.

“Unfortunately, the fundamentals of these markets remain static with flat or declining populations and relatively high unemployment rates,” Fox explains. “These factors contribute to a high housing supply with low demand that are unlikely to change anytime soon.”

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“Some interesting trends are also emerging with this forecast. Parts of California are starting to see an uptick in forecast appreciation with top performing markets such as San Diego, San Jose, Los Angeles, and Sacramento expected to have appreciation from 7.5% to 8.0% which is up from 6.5% to 7.5% from the last update.” Fox continues, “Also, many Texas markets are softening with Dallas and Austin losing 1% in forecast appreciation since the last update.”

US Housing Market Outlook Q1 2018: VeroFORECAST Predictions

Is Your Marketing DB An Asset Or Liability?

We work with lenders across the country to help them leverage marketing automation so that they can attract potential new borrowers, keep current borrowers informed and past borrowers connected for future business or referrals while increasing customer satisfaction.

Invariably, lenders what to know what kind of marketing programs we have, how effective are campaigns are, what type of templates we have and how customizable the system is and best practices or examples from other successful lenders. Lenders want to know when they can start emailing prospective borrowers, how soon they will be getting leads and why it is not happening faster.

These are all good questions, but what amazes me is that they always want to jump to the marketing materials before we even discuss the most important first step. So what is the important first step that many lenders look past?

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The first step is discussing the condition of their marketing database. You would be shocked at how many lenders say that they want to start marketing immediately but when asked about the condition of their marketing database we hear things like this—“I think we have a list from the last couple of trade shows”, or “don’t worry about that we will send it over to you later”, or “I think we have a spreadsheet with that information somewhere.”

Unfortunately, these and many other similar responses indicate that the marketing database is not in the condition needed to fully maximize new and evolving marketing strategies. Would it surprise you that many trade show lists only include a physical address and not an email address? Or that lists that you buy online don’t always include the person’s full name, title or the physical address? O the information is outdated and has not been updated in years? At this point the lenders database is definitely a liability.

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If the keys to successful marketing to todays millennial home buyers include a dynamic mix of print and digital marketing materials delivered in a highly personalized manner specific to that individual when they are searching for a home, isn’t it absolutely critical to have a clean marketing database with as much information about the potential borrower as possible?

The companies that are most successful at attracting new borrowers understand that one of their greatest assets is their marketing database. It is the lifeblood of their organization and as such, treat it that way.

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They understand that to have a clean marketing database takes a commitment on a daily basis to constantly be updating, modifying and cleaning up this information. Information is power, and the companies that have a clean database are in the best position to maximize that information to drive new business.

If you want to successfully leverage marketing automation to attract new borrowers, it all starts with your marketing database, one of your businesses greatest assets.

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Helping Lenders Comply With 2018 Regulation

Veros, a provider of data, analytics and technology for the mortgage banking industry, has developed a solution for lenders specializing in PACE (Property Assessed Clean Energy) loans in the state of California, where new compliance requirements went into effect on January 1, 2018.

VeroPACE, available through the VeroSELECT ordering platform, will generate, analyze, rank, and report the multiple Automated Valuation Models (AVMs) now required for PACE lending by California State Assembly Bill 1284 and the companion State Senate Bill 242.

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“The passage of this legislation significantly changed the valuation process for PACE loans, which are used to finance greater energy efficiency in homes,” said Veros VP of Sales Rob Walker. “Historically lenders could process a PACE loan in California using the results of a single AVM, but they now need three AVMs and must use a new method of calculating the final value.”

AB 1284 intends to enhance PACE underwriting by requiring lenders to obtain the three AVMs from a third-party vendor, then choose the one with the highest confidence score and calculate the midpoint of that AVM’s high-low value range. The resulting value, combined in a report with data from the three AVMs, becomes the valuation submitted with the PACE loan application.

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“Ordering three AVMs on the same property can be difficult,” Walker added. “And because different AVM providers have different methods of producing confidence scores and values, the mid-range requirement has presented some significant challenges for many PACE lenders. Also, if lenders cannot get three AVMs, they have to get an appraisal, which will add time and cost to the loan application process. To combat this, lenders need to achieve high AVM hit rates.”

“The good news for PACE lenders who are struggling with this new compliance requirement is that VeroPACE handles the entire process for them,” said Luke Ziegenmeyer, Director of Product Management at Veros. “And, if need be, we have an optional add-on for VeroPACE users that can facilitate the request and delivery of appraisals as well.”

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When VeroPACE is ordered through the VeroSELECT platform, a single data call is made, which generates a “cascade” through which up to 10 AVMs may be run to increase the likelihood of getting a hit. The VeroSELECT system stops requesting AVMs once it has received three valid hits. VeroPACE then determines the AVM with the highest confidence score, calculates the average of its high and low values, and returns it to the lender in a standardized data format. VeroPACE also generates a coversheet with all the data elements that can be put in a file of supplemental information.

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