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How Local Lenders Can Remain Competitive

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The housing market experienced an all-time high in 2021 due to a mix of low-interest rates and limited availability in desired areas leading to an overall increase of 16.9%, according to data from Freddie Mac.

Market conditions in 2022 are, of course, not exactly the same, which has prompted people to question whether what goes up must come down. The current situation shows that mortgage rates are facing challenges in the form of skyward inflation, and the Federal Reserve’s plans to increase the federal funds rate which could drive up the rates. As is known, demand declines primarily as a result of rising interest rates or a slowing economy in general.

If lending teams wish to surpass these potential obstacles, they will need to act strategically, become more efficient, and think imaginatively in order to remain robust to margin compression.

Here are a few steps that local lenders can follow to maintain longevity in their loan fulfilment operations in 2022 and beyond:

Invest in back-office technologies that will improve their business

Given that improving the customer experience is a necessary priority in a highly competitive mortgage landscape, lenders may be selling themselves short by failing to streamline the entire lending process. According to McKinsey, financial institutions can realize a 50% improvement in productivity and customer service by automating the whole processes, such as workflows and decision making, as well as ancillary processes, like resource planning.

It’s necessary to optimize back-office work to lead the way toward greater profitability, especially at a time when research like Moody’s Analytics shows that home buyers of all ages want some considerably simple digital options. In recent times, as consumers have moved toward digital channels, expectations are fast leaning towards more efficient processes.

Manual processes often increase the likelihood of errors as information is entered from multiple touchpoints whereas digitization offers more efficient workflows, stronger pipeline management, and access to a wider range of rating models to reduce risk.

However, unfortunately, only about 29% of lenders focus on the need to streamline business processes as a top priority. To attract and maintain market share, lenders need the right kind of insights to focus their efforts and keep their back-office game really strong.

Adapt lead funnels to changing loan volumes

In a competitive market like the mortgage industry, staying ahead of competitors is crucial for success. As companies increasingly realize the volatility of the market, gathering high-quality leads becomes an increasingly difficult task. A study has shown that 61% of marketers consider lead generation their number one issue in marketing.

However, at a time when borrowers have access to more lenders now than ever before, it’s paramount for lenders to implement marketing strategies that help them stand out. It is imperative to focus on adapting their lead funnels to changing loan volumes by marketing lending services to an audience to convert them into clients.

Like most other industries, the goal is to bring leads down into the marketing funnel in a smooth and easy way.

Use a scalable loan fulfilment solution

It’s a given that as the customer base increases, servicing loans can become complex. Since every customer has different terms and payment dates, it could be cumbersome to keep everything in order.

A robust loan fulfilment solution can help sort out the entire process and do much more. It helps to use solutions that are modular, scalable, and have customizable components that organizations can use for complete automation.

Such digital loan fulfilment solutions enable lenders to automate their processes, right from loan applications to disbursal and everything else in between. From a simple online loan application form to a complete digital lending suite, they offer solutions for every aspect of the mortgage business.

While there are solutions available in the market, it is essential to be clear about prevailing trends, relevant technologies, and most importantly – what your business needs. In general, the platform should be strong, scalable, and should support multiple channels. But at the same time, it should make operations more efficient through automation solutions and a collaborative environment.

How PrivoCorp can help

PrivoCorp is a full-service mortgage solutions provider delivering mortgage origination, servicing, and title solutions. It offers end-to-end mortgage fulfillment services that can help lenders enhance efficiency while providing them with a competitive advantage.

The only service provider to serve mortgage lenders with a full scale of services in a mortgage lifecycle, PrivoCorp gives back-office support right from setup to Post-closing to help lenders save time and cost.

With over 10 of experience working with customers, self-motivated teams, automated workflows, and intelligence powered by AI & ML technologies and digital compliance, the company ensures operational efficiency and customer satisfaction.

To know more, get in touch with us today.

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