mortgage lenders USA

Lenders Need to Bank on this Proven Strategy for Success in a Post-Pandemic World

Mortgage Lender Jul 19, 2021

Over the past few months, mortgage rates and closed loan volume have surprisingly been on the rise. The possible reasons for this could be the dwindling unemployment numbers since the peak of the Covid-19 pandemic, more people receiving the stimulus check from the government, and the positive outlook of a fast-recovering economy.

However, lenders should not assume this good run to last forever. The present time is crucial for them to establish and reinforce a solid foundation for long-term success. Lenders must revamp their workflows, organize their finances, and pursue better customer satisfaction scores. The pandemic caught them off guard and inflicted severe operational and financial distress, and they cannot afford to repeat the mistake of staying unprepared for future crises.

The U.S. economy is predicted to grow by 5.3% in 2021, pointing to a stable housing market in the coming days. 

Lenders Need to be Prepared For these Possibilities:

mortgage lenders in USA

Gradual Rise in the Sale of Both Existing and New Homes

In difficult times like this, it is delightful news for lenders that homebuyers are applying for bigger mortgages as the prices of homes soar. Applications for refinancing of homes are also increasing steadily, indicating the possibility of a busy second half of 2021 for lenders. One challenge lenders would face is scaling operations to handle the rising number of applications. While they must focus on the experience of the customer, the staff will be inundated with huge paper trails and lose valuable time in the tedious administrative tasks.

In 2021, the total home sales are predicted to be 6.2 percent higher than last year.

A Growing Demand for Better Turn Times

In this volatile market and changing landscape, the best opportunity for lenders to create value is through improving the quality of their services with a shorter loan processing timeline. The mortgage loan process is often complicated, spanning multiple systems and departments. But if it is too slow, lenders may start losing clients owing to poor customer feedback and long wait times. A fully transparent process is the key to the optimal resolution of this problem.

Competition Getting Intense in the Post Covid-19 Era

The last six months of 2021 promise new opportunities for mortgage lenders in the form of rising home sellers and buyers, growing rates of lending, and the overall revival of the economy. However, the chances of lenders facing unprecedented competition are also very high, owing to the past eighteen months of dry business and depleting revenue streams. Among the key factors in leading the competition, optimized business processes, enhanced customer services, and cost control would be critical for lenders.

In 2019, the average worth of a home was around $245,000. Today that figure is over $266,000.

The Need for a Long-term, Crisis-proof Business Model

The pandemic has established that the only way for lenders to survive is through digitization. They can benefit heavily from automation technology that has applications throughout the loan process. Modern integrated and automated systems like chatbots and portals that are powered by Artificial Intelligence (AI) and Robotic Process Automation (RPA) give a distinct competitive advantage. Mortgage lenders should invest in digitizing operations with tools like MSuite that can drive massive improvements in loan processing time, quality, and cost.

From November 2020 to November 2021, home values are predicted to rise by 10.3% The median sale price appreciation is predicted to go up by 5.7%.

Why Outsourcing Qualifies as a Trump Card for Lenders?

Hiring a mortgage process outsourcing partner has been the secret of successful lenders over the years. A deep understanding of the fundamentals of mortgage operations and the possible bottlenecks place such firms in a commanding position to drive profitability for the client. With things shaping up fast for lenders, they would inevitably need an expert to assist their teams in running operations.

Keep Up with Sudden Demands for Resources

As individuals are currently questioning their present mortgage situation and turning to their lenders for help, a mortgage BPO firm can help the lenders deal with the larger than usual request volumes. Such firms possess the resources to handle sudden changes in the demand for services and can deploy trained professionals to the rescue at short notice.

  • The outsourcing partner enables the lender to operate at maximum capacity. With seasoned professionals in charge of the back-office tasks, the lender can continue delivering exceptional services to its customers.
  • Increasing the scale of mortgage operations can lead to decreased service quality. However, mortgage BPO companies maintain high standards of quality throughout the lending cycle with time-tested operating models and custom KPIs for performance calibration.

Integrated and Automated Systems for Streamlined Loan Processing

Operations completed with zero errors while maintaining high efficiency is the primary objective of leveraging digitization in mortgage operations. The outsourcing partner can either go for an off-the-shelf solution or build a custom one that enables the lender to realize comprehensive and accurate credit checks, appraisals, document management, underwriting, etc.

  • With the remote working model accepted as the new normal, custom solutions to carry out operations deliver the much-needed flexibility the mortgage workforce needs. With automation handling most tasks, the staff can devote time to the core goals.
  • Mortgage service firms apply big data and machine learning to not just predict market trends but also the chances of upcoming crises. With data analytics, lenders can evaluate risks and prepare for possible operational blockers by devising a robust backup plan.

Ensuring High Customer Satisfaction

Maintaining high standards of customer experience in every interaction of the lending lifecycle determines the success of the lender. During the peak of the pandemic when everyone was confined to their homes, the digital tools of mortgage BPOs enabled service teams to collaborate flawlessly with customers and address their grievances to a large extent. 

  • Today borrowers expect the same experience from lenders which they get from other industries such as retail. They want quick call answering, omnichannel collaboration, faster complaint resolution, and 24/7 support, which underscores the need for a BPO partner.
  • Besides delivering personalized experiences to customers, a mortgage back-office services partner automates tedious tasks like data entry, documentation validation, etc. which directly affects the customer satisfaction numbers.
Managing costs and realizing operational efficiencies are the top priorities of mortgage lenders. Outsourcing emerged as the leading choice for 41% of mortgage lenders to produce those efficiencies.

Accurate Risk Evaluation

Risk evaluation and mitigation in lending have always been a worry for mortgage businesses. With an influx of applications and portfolios after the pandemic, most lenders will find it difficult to determine which borrowers to lend to. In response to such problems, mortgage BPO firms can be of great help as they use custom risk evaluation mechanisms based on the unique dynamics of the lender.

  • BPO firms can help adjust underwriting policies to mitigate the risks of the current times. They can perform meticulous evaluations to check if the borrower meets the minimum requirements for the loan.
  • They can assume full responsibility for managing the multitude of mortgage documents and verifying the authenticity of information involved in closing on the loan.

Ensure Minimal Overhead

Financial institutions running their own loan processing teams find it to be a costly and time-consuming strategy, particularly during crises. Most lenders cannot manage to hire and train employees, pay staff salaries, and procure the equipment required for the job.

  • Mortgage outsourcing services either charge a reasonable fee or customize their charges as per the requirements of the client.
  • The team they deploy is already trained and experienced in every aspect of loan processing, which significantly reduces infrastructure and staffing costs.

Outsourcing brings a level of expertise to mortgage process handling that is not commonly seen with the in-house teams of lenders. It is this expertise that can decide the lender’s fate in pursuing the opportunities in the coming days. This, coupled with the substantial cost savings, customer retention, and technical advantage that BPOs offer, is driving more lenders to embrace outsourcing as an integral part of their operations.

Who We Are and Why Our Expertise Matters?

At Expert Mortgage Assistance (EMA), we have earned the reputation of being a bankable name for all types of mortgage back-office services. Because we use our proprietary tool Msuite to recalibrate mortgage processes for higher efficiency, our clients, by default, get a head start in the competition. Our end-to-end mortgage digital solutions are tailored to the unique challenges and opportunities of our clients, ensuring high throughput, reduced costs, and improved experience.

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