Starting with Rocket Mortgage's highly publicized public offering in August and United Wholesale Mortgage, Caliber Home Loans, AmeriHome Mortgage, and LoanDepot.com all recently taking steps to go public -2020 is the year of the mortgage lender IPO.
The public filings provide a wealth of information to other mortgage lenders that may not have the scale of these behemoths. Digging into the Rocket Mortgage S1 we can see how effective use of technology is a pillar of their customer acquisition strategy and one of the key tactics in maximizing customer lifetime value.
"As a result of our operational excellence, in 2019 we achieved overall client retention levels of 63%, and refinancing retention levels of 76%, which is approximately 3.5 times higher than the industry average of 22%."
With new norms limiting in person interaction, the digitization of the mortgage industry shows no signs of stopping and is only accelerating even faster than it was in 2019. The reality is that financial institutions of all sizes need to adapt to digital as much as possible.
How do independent mortgage banks, credit unions, and depositories compete with these behemoths?
Here are some ideas that can help you differentiate yourself and your company.
Be easy to work with. Be available when buyers need you and work on their terms. Customers don't want to wait for you to return a phone call or email to get a new pre-qualification letter or understand how much an additional $10K on a house will add to their payment - Rocket Mortgage technology is just a click away. And once that customer leaves your ecosystem, it's hard to get them back. Tools like QuickQual let you offer these same capabilities so your customers don't need to look elsewhere for answers.
Spend time being the valued advisor in the transaction. Brush up on special programs that might be available that borrowers won't find from a quick Google search. Are they looking in a USDA Loan Eligible area? Be sure to educate the customer on this program and they'll be less likely to seek out other people or websites for advice.
Make smart investments in technology. While digital mortgage capabilities have accelerated and lenders need these tools but you need to be smart about your investments. Make sure that when you're augmenting your technology stack that the vendor has an engagement plan to train your team to make sure you're getting the most out of your investment. Even better if the vendor company will work with your real estate partners to help get them onboard and understand the investments that you are making to help them.
The mortgage industry is rapidly evolving and changing but staying on the forefront of these changes and understanding the new dynamics will help you remain competitive against the publicly traded giants.