By Mike Seminari December 2020
By all accounts, 2020 has been a banner year for the mortgage lending industry. With rising loan amounts and absurdly low interest rates, many lenders’ total loan volume will end up two or even three times what it was in 2019. And the prospects for 2021, initially forecasted to suffer a 50 percent year-over-year drop in refinance volume, are improving. A recent Black Knight report shows that the number of high-quality refinance candidates was its highest ever in September — 19.4 million — and continues to climb. This suggests that that the refinance boom may be far from over and that forecasts for 2021 may be significantly underestimated.
While mortgage lenders are basking in their 2020 success with an eye toward future profits, they would be wise to remember that this has been a tough year for many of their clients, particularly those who needed a lower payment or a cash-out infusion just to stay afloat. Small business owners, restaurants and retailers in particular, have been the hardest hit, with more than 160,000 closing their doors for good. And according to the Mortgage Bankers Association (MBA), the number of homeowners currently still in forbearance plans remains remarkably high at 2.9 million — nearly six percent of all mortgage loans. Additionally, 2.3 million borrowers are currently 90 or more days past due — that’s five times the amount entering 2020. These are good reminders that even if you’re not feeling the financial pinch of the pandemic, there are plenty of people who are. The end of the year is a great opportunity to show your customers that you care about them and that you are thinking of them.
A healthy and appropriate response to a generous windfall is, quite simply, generosity. And what better time than when our bank accounts are flush with commissions and bonuses?
Here are a few ideas for practicing generosity this holiday season:
If you’re not already in the practice of thanking your borrowers in a tangible way, then buying gifts for everyone might feel daunting, especially if you did a lot of loans this year. I could tell you that the referrals you’ll end up receiving will cover the costs many times over, but any way you skin it, there will be a substantial “felt” cost on your pocketbook. Granted, you don’t need to buy everyone a gift, especially if you did hundreds of loans this year. If your list is long, or if you’re on a limited budget, I’d recommend working your way down your borrower list like this, as resources permit:
Also, don’t feel like you need to buy every customer a $200 steak dinner. Something inexpensive, yet indulgent like a $15-20 box of chocolates (or even a gift card for the same) can go a long way toward generating good cheer — and customer loyalty. If you’re crafty, create your own holiday gift box with a candle, some artisan snacks and maybe a nice bottle of seasonal hand soap for $20-30. The holiday season is the perfect time to surprise and delight your customers in this way precisely because it’s unexpected. That’s what creates the delight and that’s why it will not be soon forgotten. I still remember and recommend a loan officer who sent me wreath one year for my front door — and that’s the first thing I think about whenever I think of him.
Thanks to RESPA regulations, giving gifts to referral partners is off the table. But what about donating to charities “in their name” or “in their honor?” According to my compliance sources, this is well into the gray area and would be tempting fate.
The safest, RESPA-compliant way to donate is to do so without ties to referral partners. Simply pick one or more charities yourself, then commit to donating a certain percentage of your commissions — or a fixed amount per loan — in the month of December.
A few things to keep in mind:
*STRATMOR recommends discussing any of these recommendations with legal counsel.
2020 is a year when the typical, mass-produced holiday card (or e-card) just won’t cut it. We’ve been through too much together this year for platitudes and generic sentiments. By acknowledging our shared time in the trenches in a personal note, you have a real chance to connect on a personal level and make a lasting impact with your customers.
So do away with the boring budget cards, invest in some nice stationary and sit down and write down a personal note of thanks. Maybe even do the whole melted wax stamp thing for the “wow” factor. Again, if you did hundreds of loans this year and just the thought of penning personal notes makes your hand hurt, start with the borrowers who will appreciate it the most: “essential workers,” small businesses owners, and those in hospitality, restaurant or other harder-hit sectors.
Here are three strategies you can implement today to create connections with your customers:
Find out more about the MortgageSAT Borrower Satisfaction Program, a service of STRATMOR Group and CFI Group, and how transparency into the loan process can help your company. Contact MortgageSAT Director Mike Seminari at firstname.lastname@example.org.
STRATMOR works with bank, independent and credit union lenders on strategies to solve complex challenges, streamline operations, improve profitability and accelerate growth. To discuss your mortgage business needs, please Contact Us.
The most successful lenders live by their numbers; they embrace change and create a culture of accountability and transparency.
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