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How the Consumer Experience is Driving Change in the Mortgage Industry

Jeff Solomon
Dec 27, 2010

It’s 9:00 a.m. on a Monday morning. Bill Bailey arrives at work, pours a cup of coffee and sits down at his desk. Before starting his day, Bill decides to go online and search for a mortgage. Over the weekend, Bill and his wife spent several hours working through their finances trying to figure out how they were going to pay for their son to go to college in the fall. They had come to the conclusion that they might have enough equity in their home to refinance or take out a home equity line of credit, but the idea of talking to another mortgage broker produced a sinking feeling in Bill’s stomach. He remembered the nightmare his family went through last time they got a mortgage—they had nearly lost their house due to a scrupulous mortgage broker who got them into an unscrupulous program. Reluctantly, Bill suggested to his wife that he would go online to see what kind of rates were available. Being more than a bit apprehensive, Bill clicked on the first search result and completed a short online application for a mortgage refinance. Within minutes of completing the form, Bill was bombarded with calls from mortgage brokers. “Hello Bill, this is Sue from American National Mortgage, I received your inquiry online, do you have a moment to discuss your financial goals?” Discussing his financial goals wasn’t exactly what Bill was expecting, but neither was the rest of the process he went through with Sue to refinance his house. Adopting a consumer-centric approach Enter the new consumer-centric approach to mortgage lending, a practice that many lenders are now adopting. The idea isn’t new as some financial institutions have always approached the lending process this way, but now, a greater number of lenders are recognizing that consumers have become more informed than ever before about their personal finances and aren’t about to be deceived again. Add to the equation, government-stipulated regulations, and lenders have little choice but to change their lending practices. Providing a good consumer experience means a lot more than just being nice, it means being transparent about every aspect of the lending process. Lenders must be open and honest in their communication from start to finish, including the lead generation process. Landing pages must accurately explain the lending process. Being the first to contact a consumer means more than just selling a mortgage; a consumer’s financial goals must also be taken into account. There are far fewer loan programs these days from which to choose, which makes comparison shopping less effective. To win consumers’ business, lenders must provide more value, such as supplying accurate quotes quickly by phone or by e-mail. Many pricing engines make it easy to offer consumers automatic quotes within minutes of completing a contact form, but sending the same rate and program to everyone is a recipe for disaster. Lenders should only work with pricing engines that update rate sheets frequently and have highly accurate quoting technology. New Real Estate Settlement Procedures Act (RESPA) rules require loan officers to be appropriately licensed, thus mortgage companies can expect big penalties if their loan officers discuss mortgage options in states in which they aren’t licensed. But routing leads to the right loan officer goes beyond just state licensing. The most effective mortgage companies are implementing skills-based lead routing to align consumers with loan officers that have similar interests, backgrounds and experiences. The sales process for both refinance and new purchase loans takes longer than it used to. Lenders should be prepared to work with customers for greater lengths of time to win their business, which necessitates setting follow-up reminders, prioritizing call-backs and leveraging automatic e-mails. The days of one-call-closes are long gone, and mortgage professionals who embrace lead nurturing will benefit greatly. Lead nurturing is about consistent, relevant communications to consumers. The key is relevance. Sending an e-mail simply asking if a consumer is ready to refinance is not a relevant piece of communication. Lenders should take care to create a string of drip e-mails that have useful content for consumers. Success relies on how much information about the consumer was learned during the discovery calls early on in the process. With good intelligence about who the consumer is and what they are seeking, lenders can customize content that will be relevant and useful. Implementing a customer-centric approach requires a combination of effort, discipline and automation. Lenders who want to be successful should consider upgrading their lead management process or investing in software to optimize customer acquisition. Mortgage professionals can learn from their failures, as well as their successes. In fact, many of the best practices learned from the lending boom, such as speed to contact and consistent follow-up, still apply. Lenders must combine those tactics with a consumer-focused attitude to win in the new mortgage landscape. In the end, Bill didn’t refinance his home. Sue had done a great job understanding Bill’s financial situation and had recommended he wait and focus on maximizing his credit. Of course, Sue will be staying in constant contact with Bill because she knows that eventually he will refinance and that being a valuable resource for Bill now can pay dividends later. That’s a customer-centric lending experience. What’s yours like? Jeff Solomon is founder and senior vice president of product and marketing for Leads360. He is responsible for defining and implementing the strategic product roadmap of the company, as well as overseeing the company’s lead generation and branding efforts. For more information, visit www.leads360.com.
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