Well, it’s certainly an exciting time to be a wholesale lender! While 2021 saw a surge in homebuying – in part due to low-interest rates – now that the Federal Reserve has begun increasing interest to pre-pandemic levels there is still real potential for serious broker acquisition. As the cost of borrowing for consumers has become more expensive, the net interest offers great opportunity.
Over the past couple of years, we’ve endured an uncertain domestic market. Lenders have had to prove their flexibility to market their rates to brokers across the United States. But rising interest rates slow economic growth, meaning the acquisition of new brokers should be cheaper. Competition is strong in the mortgage industry, so acquiring new clients is vital to maximizing profits and maintaining a resilient client base.
In 2022, there are many strategies wholesale lenders are using to acquire brokers. Keep reading to find out more.
Tackling Lender Challenges
Of course, completely avoiding challenges in the mortgage industry is impossible, but by simplifying key processes you make them consistently easier to overcome. “Many origination and service processes are still slow, manual, labor-intensive, and fragmented,” says McKinsey & Company. So lenders must prove to prospective brokers that their processes stand apart and that they are well prepared to handle whatever comes their way.
It’s likely lenders will always have to face fierce competition. Brokers partner with multiple wholesale lenders, banks, and credit unions, building relationships that involve special deals and exclusive rates. At a minimum then, lenders are doing more to prove they have the best marketable rates to beat the competition and exceed expectations.
While mortgage trends are constantly evolving, technology is a steadfast tool that can help monitor how to handle whatever challenges are around the corner. These days, every lender should at least show an understanding of the technology available to prove they take their clients’ business seriously.
Technology is In
If the pandemic showed the mortgage industry anything, it’s that technology is the future. Embracing a remote workforce through COVID restrictions helped make the loan process easier and more accessible for lenders, brokers, and consumers alike.
The industry is currently undergoing a digital makeover, with mortgage professionals harnessing technology to make the consumer experience smoother and faster. Tech facilitates improvements in customer service, loan services, and underwriting. It helps lenders speed up the mortgage application process and cut costs.
Great technology is helping wholesale lenders be faster, sharper, and stand out in the industry. According to Michael Brenning, President of AmeriSave Wholesale Mortgage Solutions, the “broker has the secret weapon… choice”. Brokers can easily shop around for rates among lenders and cherry-pick which suits their customers most. Lenders are making it easy for brokers to work with them, by providing all the information required upfront, especially with tailor-made platforms.
ReadyPrice is one such technology that removes barriers for brokers to partner with lenders. This easy-to-use software allows lenders to expand their reach, layout their offering, and attract more brokers. ReadyPrice is of no cost to brokers, giving them more incentive to use the software to search for lenders. They can manage and deliver loans directly to their favorite lenders, streamlining the mortgage process.
Two types of digital technology trending among lenders to acquire brokers are automated software and artificial intelligence (AI).
Automated Software and Artificial Intelligence are Attractive and Effective
The future is here. With pressure from consumers to get things right, lenders are already optimizing their processes by exploring the use of artificial intelligence and automated software. And, this usage within the mortgage industry specifically will continue to increase in 2022. Cognizant estimates that 60-70 percent of mortgage processes can be automated – considering the unprecedented levels of speed and accuracy currently expected in the industry, leaning on automated software is critical for success.
Lenders can literally quadruple how many loans they process. Automation software can streamline underwriting, loan processes, customer services, and even more. ReadyPrice allows users to run automated processes, making it a win-win for brokers and lenders alike. Using old manual methods, roughly two loans are processed in the underwriting process a day – the use of software could increase this fourfold!
Providing quicker, more accurate underwriting services is not only saving lenders time but increasing their capacity, leaving them with more time to market their rates, acquire more brokers and earn more revenue.
Lenders currently implementing AI in their processes believe it will predict outcomes with greater accuracy, show less bias and reduce mistakes. A survey by Forbes found mortgage professionals want to implement AI to reduce operating costs, improve customer experiences and deliver personalized customer experiences.
AI can also make lenders fairer, meaning the benefits go beyond lenders and brokers. It can instantly retrieve information and process large amounts of data. Mortgage lenders can use AI to seek information from borrowers, using this data to assess which loans would best suit them based on their finances, loans, and income. Lenders could use AI to remove human biases that might discriminate against minorities. Traditional lending models can discriminate about 40 percent more than algorithm-based mortgage solutions.
Big data is key to understanding broker behavior. It takes more than automated software, artificial intelligence, and other technological tools to acquire brokers. Lenders must understand brokers’ behaviors and needs. Lenders can increase their credibility by keeping updated with industry knowledge and mortgage trends.
Networking with other mortgage professionals can help lenders learn about success and growth in the industry. Large volumes of data should be systematically extracted and analyzed by lenders to understand brokers’ evolving needs. Big data can keep lenders informed about market trends; this insight helps them decide their products and rates.
As Jon Sykes of Carbon Intelligence points out, “data is at the root of change…[and] transition”. Data can provide a starting point for impactful action, including informed decision-making, innovative processes, and increased revenue.
Lenders can combine data with technology to provide advanced analytics about the mortgage process. They can assess areas that are doing well or where improvements can be made.
Tailored for what every mortgage professional needs, ReadyPrice sends lenders daily and monthly industry insight reports to provide them with the data they need to ensure an edge in the pricing game.
The Personal Touch
Hyper-personalized messaging sets lenders apart. Consumers are asking for more communication throughout the loan process, according to Ellie Mae. Direct communication is necessary to provide information to consumers and brokers about rates and the benefits of choosing a lender’s business.
Automation and AI technology can be used to provide hyper-personalized messages to lenders and brokers. Chatboxes can provide consumers with valuable information to help them navigate through the mortgage process.
Honest and open communication can make the underwriting process smoother and lead to more closed loans.
Rapid changes to the mortgage industry have meant lenders have had to adapt how they acquire brokers and clients. Market trends in 2022 have seen a bigger focus on lenders utilizing technology to drive value for their consumers.
Lenders must plan business models that are resilient to interest rate hikes and can compete against competitors. New marketing strategies and tools are trends that have reinvented the industry and helped attract brokers and savvy buyers.
Harness technology and streamline the mortgage process with ReadyPrice. With strong product knowledge and seamless software, ReadyPrice makes acquiring brokers easy. Contact them today and see what they can do for you.