The following post is part of a series of blogs written by MeridianLink Partners who attended the MeridianLink LIVE! User Forum in May 2022. To learn more about the event, click here.
By: Anthony Ianni, Maxwell Capital Solutions Director
Mortgage professionals are no strangers to market fluctuations. Following the massive volumes of 2020 and 2021, the current environment represents a return to normal. Still, with the impacts of COVID-19, steadily rising interest rates, and shrinking margins, this return to “normal” feels anything but business as usual. So, when times get tough, the question becomes: how quickly can I adapt?
Adaptability calls for a company culture that embraces innovation in technology, partnerships, and process, starting with an appetite to embark on change and an understanding that what worked in the past may not be the best path forward.
Adopt Technology to Support People
Technology is increasingly becoming a necessity as opposed to a convenience. A recent Maxwell borrower report found that 73% of millennial and Gen Z borrowers choose their lender based on their online mortgage experience. This does not mean abandoning your lending community, as the same group reported that they also value personalized, face-to-face service with their loan officer. Lenders should seek a technology solution that provides a digital borrower experience while simplifying the process for their loan officers and back-office staff to serve both purposes, allowing their LOs to deliver on modern borrower expectations.
A solution such as Maxwell Point of Sale helps both the borrower and the loan officer with an easy application process, leading to an increase of submitted applications as well as automation for document collection and communication. In turn, the loan officer can focus on personalized support for the borrower, closing 15% more loans, and closing them 13 days faster, saving basis points and bolstering margins.
Flexibility Through Partnership
The right partnerships can revolutionize the way you do business. Not only will the right partner provide powerful technology and services, but they will also lend expert advice to guide you through industry changes so you can focus on your strengths. Plus, leveraging partners and their technology can help reduce errors, enhance security, and further streamline processes to deliver quality loans to investors.
Partners can provide you with agility that may otherwise be inaccessible to a small or midsize lender. In a time of market fluctuation, the cycle of hiring and on-boarding new talent puts a strain on your entire team, regardless of the size of your business. Working with a partner to supplement your existing operations, including fulfillment, diligence and quality control, can help reduce fixed personnel costs and allow you to scale up or down as your specific demand dictates.
Leverage Secondary Market Experts
To compete with large, national lenders for borrower market share, local lenders must be able to offer more competitive interest rates to go along with their personalized service. Increasing efficiency and profitability in the secondary market is a great way for these lenders to improve their margins and enhance the attractiveness of their offers to borrowers. Here again is an opportunity to lean on the expertise and technology of partners.
By partnering with a secondary market investor like Maxwell Capital, local lenders can leverage a scale that would not be available working on their own. This scale can allow lenders to protect their margins while also delivering more competitive rates to their borrowers. And, like with any other partner, you should be able to turn to these experts for insight and advice in a difficult market.
Focus on the Future
With less volume in the current market and no guarantee of profitability, it may feel counterintuitive to spend money on partnerships and technology. However, now may be the perfect opportunity to evaluate your processes and partnerships with an eye on your business objectives. Investing the time, energy, and money in these areas now can help you unearth potential opportunities to gain efficiencies and better compete in today’s market while setting yourself up for success when the inevitable upswing happens.
The decisions you make now will ultimately impact your business down the line. A proactive approach to technology, partnerships, and processes can position local lenders as innovators in a rapidly changing market.