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The PMI Pro white paper explains in detail, how brokers and loan officers can use timely information to stop loan fallout, close more loans, and earn more referral business with stronger borrower trust strategies.
“The lenders that stay in the business when it gets tough will be the ones who have a strategy for winning borrower trust,” said Nomi Smith, PMI Rate Pro co-founder and CEO and previous guest of nmpTV's Mortgage Leadership Outlook. “Today’s home loan borrowers are savvy. They get technology, they expect frequent communication and they want more information and better customer service.”
Trust is viral, said Smith in the report. She added that it will bring the lenders who earn it, repeat and referral business. Smith believes this to be especially important in the short term, as it will increase lenders' pull-through by holding borrowers tight so they don’t leave for another financing source before the loan is closed. According to the white paper, trust will also allow them to build stronger relationships with the business referral partners they depend upon for new purchase money mortgage business.
The report points out that this will be especially important for lenders with Freddie Mac predicting loan volume to fall by $2.6 trillion in 2022. This comes after lenders saw an unprecedented boost in mortgage loan volume in 2021, due to the effect of the COVID-19 pandemic.
Additionally, refinance loans are expected to dry up, and purchase business is likely to be the major driver for lenders. Though, that's not necessarily a good thing as the white paper points out, purchase loans are harder and more costly for lenders to close.
According to the company, the key to winning borrower trust lies in providing better information that results in consumers getting a better deal. One of the easiest ways to do this is to save them money on pass-through fees they have to pay. Smith says that originators can do that by getting borrowers a better price on the Private Mortgage Insurance.
Of the 70% or so of all homebuyers that will require mortgage financing to buy a home, the National Association of Realtors estimates that 52% will put down less than 20% on their home purchase, according to the report. They’ll need PMI and most originators will quote one or two of the six possible sources. By quoting all of the sources, the company believes borrowers will get the best price and they’ll begin to believe that they are working with the right lender.
“As former mortgage loans officers, we realized that saving borrowers money on PMI was a game-changer,” Smith said. “It easily put us in the ‘most trusted’ position among all of the lenders the consumer would seek information from before taking out a new loan. Unfortunately, we didn’t have time to do the research beyond getting a couple of quotes.”