The Mortgage Bankers Association predicted 2019 would be a banner year for the mortgage industry, and in its Forecast for 2020, they’ve predicted that purchase originations will increase 1.6 percent to $1.29 trillion. Refinance originations are expected to slow, decreasing by 24.5 percent to $599 billion.
With a nearly flat purchase market dawning, optimizing the customer experience will play a key role in attracting, and retaining, borrowers. STRATMOR has placed great emphasis on optimizing the borrower experience through the growth we’ve seen in the last few years, and in 2020 we will continue to beat the drum for lenders to place their borrowers first in all origination, operation and servicing decisions.
To that end, our In-Focus and Borrower Experience articles this month focus on the most impactful tactics that lenders can use to significantly improve overall borrower satisfaction. Most of these can be addressed proactively by loan originators and, combined, can make or break a borrower’s likelihood to refer business your way.
In our In-Focus article, MortgageSAT Director Mike Seminari updates one of the most widely-read STRATMOR articles, “The Seven Commandments for Achieving Borrower Satisfaction,” by STRATMOR Senior Partner Garth Graham. Mike’s new article, “The Seven Commandments for Optimizing the Customer Experience,” provides new, real-life examples and updated statistics on these edicts, along with recommendations for keeping each of the commandments. In “Prepare to Thrive in a Purchase-Driven Market,” we take the conversation a step further and discuss the importance of creating “raving fans” by optimizing the borrower experience in a purchase-centric environment.
Thank you for joining us. We hope this issue of the Insights Report helps inspire your customer experience vision in 2020!
By Mike Seminari January 2020
Lenders often ask me if there is a “secret sauce” for driving more referral business. Interestingly, the question came up more often in 2019 — a year when the industry posted record loan volumes — than ever before. In fact, there almost seemed to be an underlying frustration with the inquiry “We’re doing so much business. Why aren’t we getting more referrals?”
When I pressed one individual for more context, he said, “Our customers seem to love us. They rate our loan officers 95 out of 100, yet we’re not seeing that goodwill result in more referral business.”
The root of the frustration seems to be an assumption that goodwill toward loan originators (especially testimonials about a loan originator) will translate into referrals, when in fact, referrals and repeat business are driven by creating a delightful experience for the borrower from start to finish. For many borrowers, the loan process is like being asked to walk barefoot across a lawn that is spotted with prickly weeds. If the borrower steps on a thistle, it can ruin their experience, or at least their enthusiasm for the overall process. It doesn’t matter how quickly the loan originator comes to help the borrower hobble the rest of the way across, or even if the loan originator has a good explanation for why the thistle was there in the first place. This borrower’s experience is still tainted, and they are not delighted.
This is not a borrower who will recommend you to friends and family.
The MBA forecast for 2020 calls for originations to drop 10 percent and purchase volume to rise slightly. To thrive in a purchase-driven market, Lenders will need to be laser focused on creating a delightful loan experience for borrowers.
STRATMOR believes lenders can stabilize in the current environment and build a scalable foundation for future growth by focusing on three objectives: optimize the borrower experience, renegotiate long-term contracts and evaluate compensation plans.
Senior Partner Garth Graham lays out seven common-sense rules for achieving mortgage borrower satisfaction.
Robotics Process Automation (RPA) is more than the latest technology trend. In mortgage, RPA is helping companies re-engineer processes and transform the customer experience.