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Over the past few years, the mortgage industry has undergone drastic changes. From the housing market crash to the mainstreaming of the digital marketplace, the landscape for modern lenders is very different than it was a decade ago.
2017 brings its own set of unique trends and challenges, but this can still be the year for a business breakthrough. Instead of fighting against industry shifts, the most successful loan officers will embrace them, learn to adapt, and finish the year strong.
So what are the market trends that are driving business? Many might assume that borrowers are flocking toward lenders with the lowest rates. However, research from STRATMOR Group paints a different picture.
According to STRATMOR, 33% of borrowers make their mortgage decision based on their interaction with the originator. Another 22% make their choices based on Realtor referrals, and 11% follow the referrals of family and friends. Contrarily, only 2% choose a lender based on the lender’s fee, and 4% choose based on interest rates.
These statistics show that the driving force behind doing great business is having great customer service with lenders and referral partners. Even more than a low interest rate, borrowers want to be wowed. Today’s top producers have earned their position in the industry by putting customer satisfaction first.
COMMUNICATION
The No. 1 way to turn a borrower or referral partner into a raving fan is by communicating with them openly and frequently. No one likes to be left in the dark. When lenders keep clients well-informed through every step of the loan process, they are building strong relationships that are far more likely to continue into the future.
But what is the best way for loan officers to communicate with their clients? With more business taking place online, the impulse might be to lean heavily on email. While thorough communication through any medium is good, STRATMOR reports that lenders who primarily speak with clients over the phone initially have the highest customer satisfaction rating at 95%.
Using the phone is especially advantageous when speaking with potential or new clients. When price objections occur — and they will — lenders should pivot back toward the quality of their service. This is where the spontaneous nature of phone conversation is helpful. What might seem like avoiding the question through text or email can seem like a natural progression in conversation over the phone.
The number of satisfied customers begin to drop dramatically as loan officers become less communicative. When a customer has to call a lender for a status update, the customer satisfaction rating drops to 65%.
And when the customer doesn’t receive a checklist for completing the loan at the beginning of the process, their satisfaction rating sinks down to 57%. These statistics show just how important it is for borrowers and referral partners to feel in the know and not have to guess at what is happening with their loan. Simply picking up the phone can be the difference between building or breaking a business partnership.
TURN TIMES
Trust is one of the most important elements of any relationship. This is especially true when it comes to the relationship between borrowers and lenders. When a loan officer sets a closing date, they need to be able to deliver. And the faster they can deliver, the better.
According to a STRATMOR survey of over 150,000 borrowers, only 20% of loans close in less than 30 days. Being able to close quickly allows mortgage professionals to set themselves apart from their competition. They can increase their loan turnover rates, manage smaller pipelines and, of course, gain higher levels of customer satisfaction.
Unsurprisingly, there is a strong correlation between how quickly lenders close and the satisfaction of the client, especially for refinances. Clients who are refinancing are looking to lower their mortgage payments, so a lengthy process is bound to frustrate them. An efficient closing shows lenders are competent, but it also shows they value the time and money of their customers.
DIGITAL PLATFORMS
When loan officers implement these practices and build positive relationships with their customers, their business is bound to increase. Referrals from real estate agents, friends and family are still a huge source of business for most lenders. However, the digital market has given mortgage professionals a way they can appeal directly to new customers, one that bypasses the referral system.
STRATMOR reports that today, over 50% of real estate searches are now done through Zillow. More than 75% of those searches are pre-Realtor. Having a high rating on digital platforms is now vital in order to be successful in today’s market. When lenders are communicative and prompt, they need to ask their customers to leave positive reviews and ratings online. Homebuyers will automatically assume that a loan officer with a five-star rating is a knowledgeable professional they should be interested in working with, opening the door for communication.
A third of borrowers choose their lender based on a good interaction. The digital world gives mortgage professionals the opportunity to have those interactions with people they would not have connected with otherwise.
In order for this strategy to be successful, loan officers must be actively working to ensure a high customer satisfaction rating. Trends will shift over time, but building relationships will always be the backbone of dynamic business. By energizing their approach to service, mortgage professionals will always elevate their results.
