MReport Jan 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 17 FEATURE How can companies remain successful in a challenging mortgage environment? Here are some new year resolutions that will help businesses avoid common pitfalls. By Radhika Ojha R ising mortgage rates, a supply crunch, and problems with afford- ability at the lower end of the market are just some of the larger trends that are likely to make an impact on the hous- ing market in 2019 as sales and mortgages continue to plateau. The new year is, therefore, also a time for mortgage companies to make business resolutions, which when implemented can help them keep their bot- tom lines healthy in an ever- changing business landscape. To help them make these changes, MReport spoke to industry experts who gave four key take- aways that can help them in the future success of their compa- nies as well as the industry. 1. Service with a Smile "G reat service isn't a nice to have, it's critical," said Tony Ebers, COO, Mr. Cooper, underlining the importance of customer service in an environ- ment that is seeing a steady decline in mortgage originations. According to Freddie Mac's November 2018 forecast, single- family originations were expected to decline 9.9 percent year-over- year to $1.63 trillion in 2018 and drop further to $1.62 trillion in 2019 as a result of shrinking refi- nance activity. While total originations are set to decline, loan supply for home purchases is projected to rise to $1.24 trillion in 2019, up 4.2 percent from 2018, according to the MBA, which also projected refinance activity to fall to $395 billion in 2019, down 12.4 percent from 2018, before increasing to $410 billion in 2020—a clear indication that customer service, would play a huge differentiating factor among lenders. With the refinance busi- ness declining rapidly, John Vella, Chief Revenue Officer at Altisource, stressed the need for customer satisfaction to beat the competition. "The key to retaining your market share is customer retention and cus- tomer cross-selling," Vella said. "From the time you bring on a new customer, it is imperative to ensure that they are satisfied so that they don't leave you and come to you the next time they need a loan or another product." To ensure great service and retention, it is equally impor- tant for lenders to focus on the "emotional aspect of the busi- ness," said Tom Hutchens, SVP, Sales, and Marketing at Angel Oak. "Many mortgage lenders focus only on the transactional element of closing loans. Too often, as a result, many bor- rowers walk away from their home buying experience with a bad taste in their mouth for the lending process. Our phi- losophy is that the business and emotional side can be equally important." Dwelling on the servicing aspect of the mortgage process, Ebers said, "Our industry hasn't put enough focus on innovation on the servicing side. As one of the nation's largest home loan ser- vicers, we're addressing this and taking a different approach. We're focused on providing customers with better tools and technologies that put the home, rather than the loan, at the center and simplifying the homeownership journey." "The mortgage process wasn't designed with the consumer in mind, so it's no surprise that going through the applica- tion and funding process can sometimes be a nightmare for the average borrower," said Rick Sharga, EVP Carrington Mort- gage. "This is especially true for first-time homebuyers, who are in uncharted territory, to begin with, and under stress in today's low-inventory, high price, rising interest rate market." According to Hutchens once a lender embraces the fact that buying a home is, for some people, a high aspiration that a mortgage lender can bring to life, each loan will be handled with a more personal approach, keeping the customer front of mind. He said that at Angel Oak, the loan officers were constantly reminded that they impacted the ambitions and lives of many people. "So we treat every loan as a unique opportunity to make a difference," he said. To make the process easier and less stressful for such customers, Sharga recommended making the loan process available "wher- ever and whenever the borrower wants, and on whatever device." 2. Integrated Capabilities S harga makes a valid point. Integrated capabilities are in fact a must-have for many lend- ers today. In a recent webinar, Joe Tyrell, EVP, Corporate Strat- egy at Ellie Mae gave insights into the divide between home- buyer demands for transparency, speed, and a high-tech human- touch process and how it compared to a lender's view of consumer engagement. Accord- ing to Ellie Mae's research, 92 percent of around 3,000 home- buyers who had just completed the mortgage process had begun their homebuying process with some type of online research. When Ellie Mae had asked the respondents during the survey what was the No. 1 thing that lenders could improve in the mortgage origination process, the NEW YEAR'S ISSUE

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