Turning Pandemic Satisfaction into a Long-term Win

Sounding a bit like an oxymoron, mortgage servicers actually improved customer service scores under COVID-19, according to the J.D. Power 2021 U.S. Primary Mortgage Servicer Satisfaction Study,SM.  Last year’s survey exemplified gaps in customer service, with both call center activities and online access highlighted as challenges for mortgage servicers. This year’s study again called out latent digital capabilities but focused more on shifting experiences between bank and non-bank servicers. The primary takeaway stemming from this year’s data is that the pandemic has definitely given mortgage servicers a boost in satisfaction sentiments as customers seeking relief have relied on their servicer to navigate forbearance and foreclosure avoidance.

In the corresponding press release, J.D. Power commented that improved satisfaction gains were predominantly motivated by at-risk borrowers in forbearance.  Their director of consumer lending intelligence, Jim Houston, added, “However, as we look at post-pandemic customer behaviors and responses of low-risk customers, we see that lift in satisfaction may be short-lived. In fact, despite the attention on relief programs, nearly one-fifth of current mortgage customers have had no interaction with their servicer during the past year. Mortgage servicers will really need to up their customer engagement games as the marketplace stabilizes.”  So where does this leave mortgage servicers going forward? 

Solidifying ongoing borrower satisfaction can start with a look at current customer perspectives. The basis for J.D. Power’s annual survey evaluates customer satisfaction in terms of customer interaction, communications, billing and payment processing, escrow account administration, and new customer orientation.  Pulling responses from over 8,000 borrowers that either refinanced or originated a new loan within the past 12 months, this year’s study highlighted the following findings:

  • Non-bank servicers saw a considerable gain in overall satisfaction.  With scores that increased by 17 points, non-bank servicers are gaining on their bank-affiliated competitors who only saw a four-point rise in overall satisfaction. 
  • Borrowers in forbearance gave the highest scores for satisfaction.  A trend that is not likely to continue, at-risk customer satisfaction increased 15 points, with low-risk borrower satisfaction declining by one point. 
  • Satisfaction scores for bank-affiliated servicers were inflated by non-mortgage services.  Customers with bank products had overall mortgage servicing satisfaction scores that were 55 points higher than mortgage-only customers.
  • Cumbersome digital experiences and lagging self-service capabilities drop scores. Barely more than a third of borrowers surveyed found the information they needed within two webpages. Visiting more than two pages dropped overall satisfaction scores by 55 points! 

As servicers continue to address the impact of COVID-19 relief provisions, maintaining borrower satisfaction and engagement could prove to be a challenge. Surveyed borrowers that felt compelled to leave their current servicer cited several top reasons for a departure, including access to improved customer service and enhanced self-serve capabilities.  This supports the need for servicers to expand digital functionality and self-serve access to processes and products, subsequently ensuring satisfaction through innovative engagement and education.

Taking the lead in providing engagement and education in a digital self-serve format, HomeBinder delivers a unique borrower experience that extends beyond a basic servicing relationship. Providing a centralized home management platform, HomeBinder collaborates with the lender or servicer to offer a distinctive branded binder that can be given to the homeowner at the time of closing, servicing transfer, forbearance exit, or even upon approval of a loss mitigation plan. The advantage to the servicer is that engagement is ongoing throughout the life of the property, requiring little to no intervention from your staff. The benefits to the homeowner are extensive, including a digital maintenance plan with regular reminders, educational information on how to manage and care for their home, electronic storage of all related household documents, and so much more.  Each time the homeowner accesses the HomeBinder platform, they are reminded of their valued relationship with their lender/servicer.  HomeBinder is a genuine business differentiator, delivering a personalized “gift” that will improve borrower satisfaction, increase engagement, foster repeat business, and inherently generate referrals.

To find out how your organization can leverage pandemic customer satisfaction and create a “Client for Life” experience, visit www.homebinder.com, contact us directly at 800.377.6915, or Book a Demo today! 

HomeBinder ● Expected by Homeowners ● Driven by Lenders

How to Infiltrate and Retain the Millennial Market

The volume of millennials entering the homeownership market continues to grow.  With lower interest rates and increasing capacity to look at homes and apply for loans online, the industry has finally captured this demographics’ attention.  The question is now twofold…. How do you gain more of the millennial market share and more importantly, how do you hold onto this new generation of customers?

Millennials are unquestionably entering the world of homeownership later in life

To a lesser degree than any other demographic, they are likewise entering marriage and starting households at an older age. The Pew Research Center’s study from last year highlighted that only three out of every ten millennials between the ages of 23 and 38 lived with a spouse and child; the study’s definition of a family unit. The marriage rates for millennials averaged 44 percent, nearly 10 percent less than any other demographic for this age group, including Gen Xers. And although millennials are still of child-bearing age, the study noted that only 55 percent of millennial women have had children, compared to 62 percent of Gen Xers and 64 percent of Boomers of similar age.

Despite this latent desire to form households, millennials now make up a growing percentage of the mortgage market.  Millennials are reflected as the largest borrower segment in Freddie Mac’s recent article, “Homebuying: A Generational Snapshot.”  Closed purchase volume alone, as recorded on the Encompass platform, has increased for the past three consecutive months for millennial applicants between the ages of 22 and 41.  The average age of millennial borrowers has remained relatively unchanged. When targeting this generation the note that the average age for millennial borrowers was reported as 32.9, with May and April both reflecting an average borrower age of 32.4 years old.

The Freddie Mac Homebuyer Generational Snapshot highlighted that although they are the most educated generation, millennials have a lower financial awareness as compared to other demographics.  In general, millennials have a fairly optimistic outlook on life.  One of the primary contributors to millennial behavior is that they were raised for the most part during an economic boom.  This has contributed to a lack of financial wherewithal as they tend to focus on the purchasing experience versus monetary value. 

As lenders seek to attract and retain this generation, it is important to understand millennial values, which include transparency, accountability, persistence, and personal responsibility. Here are the HomeBinder TOP 5 traits to leverage when engaging millennials:

  1. Embrace personal responsibility – Millennials want to be good homeowners but often lack the experience and tools needed to address homeownership maintenance and repairs.
  2. Want a digital experience – For millennials that are typically not inclined to manage or retain paper documents, there is no replacement for ease of digital access to key information and documents with HomeBinder.
  3. Stress about personal financial status – Gaining understanding, organization and a homeownership game plan helps create and build confidence in overall financial health.
  4. Place trust in businesses – Let HomeBinder help you give millennials another reason to trust your company for the long haul, building rapport and engagement.
  5. Demand a meaningful customer experience – Millennials will even pay to expand service… Give them more than they’re asking for with a personal HomeBinder for their new or just refinanced home.

What’s important? 

Lenders should anticipate the needs of their millennial borrowers, instill confidence, give them control, provide alternative approaches to doing business, and incorporate digital innovation. HomeBinder is an innovative business differentiator that is uniquely positioned to help lenders capture the attention of millennial borrowers, establish rapport, and create long-term relationship value. Millennial borrowers appreciate an orchestrated, thoughtful, and personalized experience.  HomeBinder delivers a digital homeownership platform that embodies what’s important to millennials, offering relevant homeowner data, actions, education, and document access through a partnership branded binder. HomeBinder is relevant today, actionable tomorrow, and adds value throughout the life of the property.  To find out more about the HomeBinder revolutionary approach to millennial homeowner engagement and the “Client for Life” opportunity, visit us at www.homebinder.com, contact us directly at 800.377.6915, or Book a Demo today! 

HomeBinder ● Expected by Homeowners ● Driven by Lenders

Why build a “Client for Life”?

Let’s face it. Relationships Matter.

Excelling in a Highly Competitive Market

In an increasingly competitive market, lenders are seeking a meaningful way to differentiate themselves and be top of mind with their clients. While mortgage industry clients still expect compelling rates and fast cycle times, the most engaged clients tend to be those whose overall borrower experience is memorable. As industry volatility remains, now is a perfect opportunity to get the jump on the competition.

Changing the Sales Funnel Paradigm

The dilemma in many lender shops revolves around an intense focus on the transaction versus the overall borrower experience. The sales funnel often becomes the heart of the effort – generating leads and turning them into applications and ultimately funding. Some lenders are leveraging a CRM and other tools to extend their engagement with homeowners post-close, although, this is more the exception than the norm.

Actionable Customer Centricity

While it is becoming increasingly difficult to provide differentiated lending services, an industry defining customer-centric service approach can be the deciding factor in market distinction. Customer service is a worthy objective and it is rapidly becoming typical, expected and transactional. However, it is time to look beyond product and customer service. We believe there is much more that a lender can offer – a mortgage experience that is genuinely meaningful to your borrowers and engenders a long-term appreciation of your company. It is time to focus on relationships versus transactions, which ultimately leads to increased revenue, brand loyal customers and distinguished ancillary services partners.

How to Change the Mindset

Imagine, instead of only focusing on service through the day of closing, you can reward clients with a better experience at both closing and post-close. What if you could engage your clients – for life – by providing them with information, tools and resources that will help them exponentially love where they live? By engaging them throughout the entire borrower lifecycle you will convert more business in the sales funnel and, more importantly, easily win repeat business and referrals?

Read the entire Client For Life e-book here or Book a Demo today!

Competing on the Other Side of the Pandemic

Traditional technology platforms and marketing practices meant to ensure an engaging and rewarding borrower experience, including LOS, POS, and CRM platforms, are becoming increasingly necessary. All signs point to a purchase-heavy and volatile market, creating urgency to compete and create relevance for your business.

Consider the Following:

  • Market volatility, as refinance rate-locks have declined in the second quarter
  • Home inventory levels that are down 20% from 2020
  • The largest home buyer demographic, Millennials, need guidance in their homeownership journey
  • Margin compression, as direct-to-consumer lending is becoming more prevalent
  • Increased cost per lead conversion
  • Corporate investments in rental properties creating greater scarcity
  • Increasing challenges recruiting and retaining top performing loan originators

Given these factors, mortgage lenders are increasingly focused on:

  • Supporting and educating today’s borrowers throughout the homeownership journey
  • Differentiating their services beyond interest rates
  • Solutions that integrate with current tech stacks and automate post-close engagement and retention
  • Delivering sustainable value with top-performing realtors to increase referral percentage

Read the entire Client For Life e-book here or Book a Demo today!

Battling for the Borrower in a Changing Market

Coming off of a historic surge in origination volume, current changes in market activity may prove difficult to traverse for many mortgage originators.  The industry has seen record levels of volume, record net profits, and record low-interest rates, all during a devastating pandemic crisis.  These trends, however, are shifting direction and the next question becomes how quickly and how severely these changes will occur.  

Fragile Origination Margins

Momentous origination volume in a low-interest rate environment has pushed net production profit margins to new highs. The Mortgage Bankers Association (MBA) reported that profits for independent mortgage bankers exceeded 200 basis points in the third quarter of 2020.  According to Marina Walsh, MBA vice president of industry analysis research and economics, this is the first time production profits have surpassed this mark as a part of the MBA reporting effort initiated in 2008. Rebounding from this high will almost certainly crush the bottom line for many originators. Effectively summarized in a recent op-ed on “The Rough Road Ahead for the Mortgage Industry,” managing marketing costs, lead conversion, and loan officer effectiveness needs to be a key component of your origination strategy going forward.   

Pandemic Borrower Accommodations

The mortgage industry is approaching the tail end of pandemic relief, as foreclosure moratoria expires at the end of July.  Intervention remains as the Consumer Financial Protection Bureau’s (CFPB) latest ruling, effective August 31st precludes covered entities from initiating foreclosure filings until 2022. Supported by the Federal Housing Finance Agency (FHFA), the industry will continue to support accommodations that ensure homeowners impacted by the pandemic have foreclosure alternatives, including the sale of their homes.  Coinciding with the expiration of the GSE Patch and changes to the definition of a Qualified Mortgage (QM) for Fannie Mae and Freddie Mac, as well as other eligibility restrictions, product options in the non-agency and non-QM space will almost certainly stir up competition for more traditional origination shops.

Easing/Sliding Home Sales

New home sales continue to trickle down.  The Mortgage Bankers Association recently noted that overall new home sales have fallen by seven percent since last year. MBA assistant vice president of economic and industry forecasting, Joel Kan, commented on how low home sale inventory continues to escalate home prices, as well as buyer competition. There has been a recent slowdown in purchase offers for homes, and the real estate community consensus is that the continuing deficit in available home inventory is bearing down on the market. Redfin highlighted this tapering effect in their recent Homebuyer Demand Index, noting that even though home sales are up from a year ago, sales have declined by five percent since the late May high from earlier this year.

Cost to Cure

Juggling multiple aspects of the next phase in origination activity could be an expensive proposition as the cost to acquire new borrowers is most certainly on the rise.  Mortgage originators will have multiple hurdles to cross to get to the other side.  Production profits may quickly erode as originators feel the pressure of declining volume while paying enormous payroll costs to cover the talent acquired to meet the last 18 months of record volume.  Originators will also have to compete with more aggressive non-agency players that are looking to attract borrowers coming out of post-pandemic duress and amidst possible easing of the credit box.  Last but not least, as interest rates inevitably rise, whether quickly or slowly, the refinance market will dissipate, and purchase volume will slow as well as the housing market strives to rebalance.  

Where does this leave originators?  Looking for borrowers? The best, most logical solution is in your own backyard.  Cultivating the enormous volume of recently added borrowers can be a simple, cost-effective venture if you have a unique and compelling offering for homebuyers in your toolbox.  Today’s homebuyer often lacks the time, experience, and wherewithal to manage the myriad of household documents, maintenance activities, and important home-related project milestones that are crucial to successful homeownership.  Bridging this gap is easier than you think and can be a significant avenue for long-term engagement.…. With HomeBinder, your loan officers can present their borrowers with free, unlimited access to a revolutionary centralized home management platform.  This sophisticated opportunity allows your loan officers to achieve a considerable advantage over the competition, generate more referrals and create relationship longevity without extensive use of their time or cost expenditure. 

The HomeBinder platform delivers modern automation that systematizes and assimilates data derived through valued relationships with home service professionals.  By building an ever-expanding referral network that supports the homeowner throughout the life of the property, your loan officers can create a genuine “Client for Life” experience.  The HomeBinder platform is a genuine business differentiator that allows loan officers to focus on developing new leads and relationships, while existing homebuyers grow into repeat business and inherently produce more referrals.  To find out more about how HomeBinder can elevate your organization into the next phase of origination, visit us at www.homebinder.com, contact us directly at 800.377.6915, or Book a Demo today!

HomeBinder ● Expected by Homeowners ● Driven by Lenders