Rising loan costs and fast-changing conditions have created a challenging, constantly moving mortgage market. This environment pushes local lenders to make substantial changes within their practices and technology to streamline operations, trim cost, and improve the borrower experience. However, attempting to face these challenges alone is a daunting task, especially for local lenders.
Fortunately, mortgage veterans have experienced the ups and downs of the mortgage industry throughout their careers and are willing to share their insights. Bob Groody, Maxwell’s SVP of Mortgage Operations, recently joined a HousingWire panel along with Craig Ungaro, Chief Operating Officer at AnnieMac Home Mortgage, and Donielle Geiser, VP of Operations at Thrive Mortgage, to discuss the current conditions and share proven ways for lenders to drive profitability and build a sustainable strategy in today’s fluctuating market. Their best advice: lean on your partners.
Your partners are a support system for your business, providing technology and services to supplement your teams in pursuit of your business goals. Proactively examining your partnerships and their potential added benefits can help expand your offerings. Leveraging the knowledge and experience of your partners can unlock new opportunities for success, both now and into the future. By deliberately adding agility and resilience into their operations through partnerships, lenders of any size can create a strong foundation to weather down-cycles and fully capitalize on the next upswing.
Diversify product lines
You must be able to meet the needs of your market to find success, especially in a challenging environment like we see today. With rising rates, refinance opportunities have plummeted, and not all borrowers fall into the neat box of a conventional mortgage. Empowering your loan officers to meet the market with necessary products, including non-QM, ARMs, and HELOCs, can give your team the product mix they need to serve borrowers.
“[Lenders] are dealing with emerging products, and that makes a ton of sense when you have market contraction, you need more offerings to keep your market share,” noted Craig. “Those are really good opportunities to expand on technology rather than force change on something you’re already doing.”
While making these products available to your teams opens up exciting new business opportunities, as Craig notes, it’s important to do so without overwhelming your staff. Here is where lenders can leverage their partners to offer outsourced services such as processing, underwriting, quality control, and due diligence, alleviating the impact on your team while delivering for your borrowers. With an effective outsourced relationship, you can expand your product diversity without compromising your teams or sacrificing compliance and safety. Using operations support enables your loan officers to look like heroes while providing an exceptional borrower experience.
Seek advice and expertise
You’ve already chosen partners with experience in their craft who you trust to get the job done. You selected them based on their track record working with other lenders and for their expertise in the contracted area. So trust them. Ask them what they have seen drive success for other lenders, and learn from their experience. Leverage their knowledge base and keep an open mind when it comes to their suggestions. It is likely they have encountered similar issues in the past.
“If you are looking for broader expertise and your local market conditions don’t provide you with readily available access to that knowledge, that is a good indicator to look to work with a third party.” Bob commented. “Testing this is a practical way to think about how the right provider can build with you a true sustainable relationship that shows the differentiation you’re looking for.”
In the same vein, it is also beneficial to bring your partners into the discussion of the problem at hand. By bringing your partners into the issue early on, you open the door to a different perspective. Sharing your ultimate objective as well as your current roadblocks early in the process can drive you and your partner to a beneficial solution that may not have been apparent with less transparency.
Expand the scope of your partnerships
When you are looking to enhance your business, whether through technology, processing, outsourcing, or any other way, it makes sense to look to your partners and their entire set of offerings. What else can they do? By expanding an existing relationship, you forgo the steps required to onboard a brand new partner and you avoid the growing pains associated with a new relationship. If you have an existing partner you trust, it is worth looking first to them to see how else they can serve your business.
Make it a team effort
“If you’re engaging in an outsourcing situation, your partners have to be part of the team,” Donielle stressed. “They have to get the same communication, the same resources, the same training. They are a part of and an extension of your team.”
Partners are most successful when they become part of the team. Like above, bringing your partners into the problem solving process of your business can be greatly beneficial. However, it is also important to look within and get the buy-in from your internal teams who will be committing to the new partnership efforts. Making sure that all of your teams, internal and external, are on the same page is crucial to obtain your intended result, whether it involves new products, new initiatives, internal audits, or streamlining processes.
Giving all facets of your business a voice while also maintaining open and transparent communication among all teams and partners involved in the process creates an ownership culture that can lead to fresh ideas and optimal outcomes throughout your business.