BLOG VIEW: All things considered, it is turning out to be a solid year for mortgages. In fact, existing-home sales were at their highest pace in nine years in July, according to the National Association of Realtors. Unless one is new to the industry, however, the market looks nothing like it did nine years ago.
Compared with 2006, credit requirements are much more stringent, rates are lower, and inventories are much tighter. But the biggest difference can be found in today's borrowers, who are totally different from borrowers in 2006. In fact, there's actually a divide forming in the mortgage industry right now between lenders that understand and meet the unique needs of these new borrowers and those that are stuck in the past.
Lenders that are concerned that they may be part of the latter group should consider the following three things in order to cross the divide.
1. Hustle: Lenders frequently advertise how they deliver ‘fast responses’ to borrowers. Yet, many lenders have no concept of what ‘fast’ even means today. Responding to a borrower's phone call or email within with a few hours might have been impressive 10 years ago. Not anymore.
For the past two years, the largest group of home buyers has been millennials – people age 34 and younger. These folks don't like to wait. If it takes a lender an hour to respond to a potential millennial buyer, he or she could have visited half a dozen other websites, filled out a loan application â�¦ and is now off looking at homes.Â
The trouble is, many lenders are not set up to catch borrower inquiries as they come in. Some lenders let leads sit in inboxes for hours or even days. Today's borrowers know they have choices, and the answers they need aren't that difficult to get. So, when they show interest in a lender, the lender needs to be there – immediately.
2. Resolve: The salesperson stereotype is of someone who doesn't know when to quit. Yet, the reality is, many people in mortgage sales give up too easily. At our firm, we know this to be true from our own secret shopper survey of lenders, by which we found that most loan officers will call back an interested borrower just once – if at all – and then never again.
The trouble is, most mortgage professionals lack the ability to develop the right contact strategy and follow it consistently and correctly. It's critical to know when to make calls, how to make them and how often without going overboard. However, so many lenders don't know where to begin.
3. Flexibility: The market is shifting to more purchase loans that have longer sales cycles, and even refinances often take longer to qualify for. It's important that lenders stay connected and provide relevant information to keep borrowers engaged.
Lenders also need to be flexible with how they provide service. Thanks to the growth of the Internet and mobile technology, most lenders communicate totally different from how they did nine years ago. The trick for a lender is to quickly find out how to communicate with clients so the lender can make and keep them happy. Keep in mind that many millennials don't answer their phone or use voicemail.
Whatever kind of year a lender is having – good, bad or mediocre – it's most likely tied to how well the lender has adjusted its business to serve today's customers. Seeing as very few lenders are set up correctly, most have an opportunity to improve their salesmanship, cross the divide and make this one of the best years ever.
For more tips, download our company's latest e-book, ‘How To Sell In Today's Mortgage Market.’
Chris Backe is director of financial services at Velocify, a provider of cloud-based intelligent sales software for the mortgage industry.
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