Lenders have found the market ripe for growth in 2015. The indicators of a healthy market are all present: a steadily growing economy, low rates, loosening credit availability and a high labor participation rate.
Mortgage professionals have also observed new construction making a comeback for the first time since 2008. All of these indicators suggest that for the next year, lenders should expect an increase in originations and lay the groundwork to handle higher loan volumes.
In a period of growth, two things will matter: getting the business to come to you and not your competitors, of which there are many, and executing on the promises made to those prospects in an environment riddled with regulation.
If you can’t get the business in the door, all the regulations in the world won’t matter because someone else will be providing those loans. If you get the business in the door and you fail to execute, or your cost to execute eats up your net income, your hard work will be for naught. Technology can be immensely important in both sides of this equation.
Getting and retaining the right loan officers will be a key component of earning that new business. Winning the battle for branches and loan officers may largely depend on the technology you employ. The right tools in your employees’ hands lets them earn more, and if they are making more with you, they are less likely to leave for your competitor down the street.
These days it’s much more than just the loan origination system; loan officers want to know what their commissions will be. Branch managers want easy access to key performance indicators, as well as their own bottom line. Financial statements and metrics need to be timely, as the days of waiting a month for an income statement are over. This is the mobile age where the data is not only available, but expected.
Supporting that hungry demand for data will be critical. The challenge will be to deploy it at a cost that does not outweigh the effort. Automating the calculation of commissions, for example, will in many cases reduce the labor cost involved, but just as importantly, will reduce the time it takes to satisfy a loan officer.
Online financial reports and metrics put timely data in the hands of branch and regional managers and corporate executives alike, while at the same time dramatically reducing the number of employees and therefore cost needed to prepare and publish that data.
The mortgage industry has been well served by a community of technology vendors focused on the unique and intricate demands of their clients. The competition in the space among vendors has forced those technology vendors to keep up.
The benefit to the industry is that those vendors have evolved with the times and are constantly modifying their systems to meet the challenges the industry provides. The availability of trade shows, industry publications and the Internet have not only allowed large and small vendors to compete, but have made it easy for lenders to be aware of the technology available. The ability to meet with and investigate the best vendors is unprecedented.
Where are the roadblocks to success in this period? Obviously, there are many, but the promises of technology should be supported by a track record of success. All your systems should be poised for growth, and it’s essential for them to work together for you to achieve your results.
Examine your organization to discover if there are any weak links holding you back. Your ability to execute might hinge on a single system. The cost of throwing personnel at this one problem area may undermine a larger otherwise successful endeavor.
Growth in the mortgage industry is long overdue and lenders should take full advantage of a healthy market to earn their share of the business. Finding and keeping quality staff will be key, not only because of the good work they do, but when you look back at this time, you’ll think of the people more than anything else.
The nature of the mortgage industry demands a significant investment in technology. Finding the right technology for your business plan will be essential in meeting the challenges of today as well as tomorrow. 2015 is finally a welcome opportunity to grow; lenders should lay the groundwork to expand throughout this year and into 2016.