10 Tips for Mortgage Lenders Preparing for a Better Housing Market

FINALLY! Not to jinx it but rates are finally moving in the right direction. Mortgage lenders who prepare now, leveraging mortgage technology like a customer relationship management (CRM) system coupled with their experience will be poised for success.

Rates will rise and fall, and once the rollercoaster slows down the market will normalize and begin to show signs of improving.

The week of August 15^th, Freddie Mac reported the recent trend of lower mortgage rates is expected to continue.

“While rates increased slightly this week, they remain more than half a percent lower than the same time last year,” said Sam Khater, Freddie Mac’s Chief Economist. “In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market. Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”

With these market signals along with the Federal Reserve’s anticipated rate cut in September, smart mortgage lenders must optimize performance now.

What can lenders do to optimize performance for the anticipated rate drop?

To put it simply, a winning strategy for mortgage lenders that combines high tech and the human touch will benefit lenders and open the door to more clients. Technology enables a lender to effectively and efficiently serve clients. A few ways to optimize performance include:

1.      Build and organize your database. Any top producer knows that in today’s market successful lenders need an accurate database with a centralized customer data system to be well-positioned to take advantage of rate movements for clients.

2.      Target the right borrowers with the right message. Ensure the right borrowers are targeted and the message is on point. A CRM database facilitates lead generation and management. Lenders should ask themselves the question: “Would I open or respond to an email or SMS if the subject or content does not pertain to my situation, or worse looks like a mass marketing message?” The answer is obviously NO.

3.      Communicate and educate. MANY borrowers don’t know it’s best to refinance with the same lender they used originally. In fact, many borrowers assume that the lender will not want to offer a new loan for a lower rate. This is one of many examples of why communicating with and educating borrowers matters. Get the word out and educate to build trust that turns clients into repeat customers and business referrals.

4.      Target industry collaborators. A mortgage lender strategy should include building relationships with other real estate industry professionals, including real estate agents and brokers. Develop a database of broker and agent contacts for targeting and conveying specific messaging that informs and educates them, and assures the lender remains top of mind when clients need one.

5.      Use efficient targeting and communication tools. The best CRM aids in lead generation and management, and improves communication through multi-channel communication capabilities (i.e., Call+email+SMS).

6.      Segregate your targets. Lower rates benefit refinancing targets and many other scenarios such as first-time homebuyers and investors waiting on lower rates to make a purchase decision. Another example is borrowers eligible for VA or FHA loans who profit from lower rates, a carefully written message for these targets can make a great deal of difference.

7.      Co-market with partners. If your CRM has the ability, co-brand with a real estate partner, including their information in your communications. Bonus points to the lender for this one!

8.      Automate communications. Automation of routine communications helps ensure sustainability. More advanced CRM tools allow lenders to tailor their “touch” automatically via triggered data conditions.

Example: When the closed date on a borrower with a closed FHA loan at 6.5% or higher reaches 30 months, place that borrower into a 6-month refinance campaign that will automatically send out a series of emails and SMS text messages focused on FHA loan refinancing AND set several call back tasks on your calendar.

9.      Enlist power dialing. Emails and SMS are great but there is NOTHING like making phone calls for awareness and personal communication. Increasingly fewer sales teams make calls, becoming too reliant on email/SMS. Lenders who go the extra mile and call through target lists will stand out! “Power dialing” brings efficiency, allowing lenders to target more prospects. This technology auto dials through a target list and makes it easy to leave voice mails automatically or drop an SMS message on-the-fly.

10. Capture client social media links. Reliance on social media, such as LinkedIn, has become a ubiquitous tool. Capture this valuable information in your centralized database and seize the chance to incorporate social platforms into the marketing opportunity mix.

Depending on specific situations, a lender may individually be doing all of the above already or be fortunate to belong to a lender organization equipped with the right technology and expertise to do this on behalf of sales teams. There are lenders doing all of the above.

The most important take-away when preparing and building for the coming demand is to put something in place now that builds for the future. The lending industry is in a constant state of change in market conditions. Mortgage lenders who are prepared and have planned properly can sleep at night knowing that while rates may not be controllable, optimized systems put in place allow savvy lenders to exploit market movements in their sleep!

If you are committed to taking a pro-active approach for the coming wave of opportunities, let’s see if we can help you take the next steps to success. Schedule a call with us.