The US housing market created a history of sorts throughout 2021. Housing supply fell to a record low with buyers scooping up homes faster than ever before.
Now, experts say the housing demand will likely stay strong even in 2022. As per the Mortgage Bankers Association (MBA) forecast, mortgage originations are expected to grow 9% to a new record of $1.73 trillion in 2022. The forecast is backed by factors such as strong homebuyer demand from millennials, households seeking more space, and still-low mortgage rates.
According to Mike Fratantoni, Chief Economist and Senior Vice President for Research and Industry Technology, “2022 should be another strong year for the housing market. This is good news for the many would-be buyers who are currently priced out or delaying decisions because of low supply conditions and steep home-price appreciation.”
Given this outlook for the market and the expected rise in loan volumes, it’s necessary that loan officers and brokers have a contingency plan in place with regard to effective loan closing strategies. Let’s deep dive into a few points that need to be considered as lenders decide on a strategy to make the most of the market conditions.
Minimize inconsistent borrower communications
As volumes are bound to increase in 2022, loan officers would have to engage more frequently with borrowers. However, an important aspect for ensuring time- and cost-efficiency is to minimize inconsistent borrower communications. With a higher number of loan applications come several aspects like managing rigid compliance regulations, stricter deadlines, documentation, closing fees, and costs.
It’s important to comprehensively and effectively engage with the borrowers and take them into confidence so that the process remains smooth and easy. Proper and in-time communication are some important areas of the mortgage process. Timely, relevant, and clear communication is a must with borrowers to reduce time spent on unnecessary communication. loan officers and brokers
Reduce time-consuming follow-ups for documents
Through the loan process, there are chances that borrower files may sometimes have missing documents. Such incomplete files mean increased costs, delays in meeting closing dates, and annoyed clients. It is, therefore, important that all the requisite documents are in place to speed up the process.
The idea is to create a more holistic and watertight process whereby loan officers do not have to waste a lot of time in following up on documents. There is a need for effective communication with borrowers by taking them into confidence so that the process remains smooth and easy. It helps to have a partner who can conduct the process of reviewing a loan file before sending it ahead to identify anomalies early on. loan officers and brokers
Reach out to incoming leads immediately
The best time for mortgage professionals to act on leads is when they first receive them. However, many lenders simply wait too long to start following up with the leads. Studies of mortgage companies and their follow-up practices have shown that one way of improving sales is with a competent follow-up strategy.
When it comes to following up on mortgage leads, the contact needs to be established immediately and consistently thereafter. The game of mortgage is often that of persistence and lenders who pursue their leads better are more likely to enjoy greater sales results.
Lower the rate of abandoned applications
There are several reasons for abandoned loan applications, some common ones being lack of transparency between lender and prospective borrower during the approval process, failures in completing necessary forms, collecting documents, signatures, and inefficiencies within the application review and approval processes. However, loan officers need to invest efforts in finding ways and means to reduce this rate of abandoned applications.
Since price is no longer the only distinguishing factor in the mortgage industry, it is areas like great customer service that matter. There needs to be a focus on transforming the way loan officers interact with today’s consumers. Most lenders continue to manage process flows and operations across platforms inefficiently by relying on manual, error-prone tasks to complete workflow. Digital innovations can enable loan officers to simplify operations and create a seamless customer experience while reducing loan application abandonment.
How PrivoCrop can help
Companies like PrivoCrop offer complete end-to-end mortgage processing services that can help loan officers and brokers to better drive effective loan closing strategies. By partnering with PrivoCrop, you can seek expert back-office support right from Origination to Underwriting to Closing and finally till Post-close.
A full-service mortgage solutions provider delivering mortgage origination, servicing, and title solutions, People’s Processing implements strategic tools and process transformation to address the mortgage industry’s operational and customer experience challenges. The focus is to increase the client’s efficiency, capacity, and customer satisfaction while greatly reducing operational costs and cycle times. loan officers and brokers