As lenders plan for 2024, many are facing the reality that the market will continue to be challenging given a thin housing inventory, elevated interest rates that are becoming the new normal, and the disappearance of the refinance market. But for loan originators (LOs) that have the tenacity to stay in the game, there are plenty of opportunities if they’re willing to get creative, embrace new technology and focus their strategy on a single principle: simplification. Even though the challenges of the current market seem complex, the secret to finishing out 2023 strong and starting 2024 with a bang is actually quite simple with a focus on the following three elements.
1. Embrace a diverse portfolio of offerings.
Loan originators who are open-minded about expanding their portfolio of offerings, getting out of their comfort zone, and being willing to learn new aspects of the business will succeed. The days of the easy, steady stream of refinances are gone, and purchase loans are harder to come by, but other verticals offer significant opportunities. With U.S. homeowners sitting on more than $18 trillion in tappable equity, home equity lending is expected to continue its growth trajectory. As interest rates continue to hover in the 6% to 8% range, millions of homeowners that have rates in the 2% to 4% range aren’t likely to budge anytime soon. What they will do is take advantage of the record-high equity in their home for things like home expansion and renovation, debt consolidation, college tuition, and other big-ticket items.
Likewise, reverse mortgages are expected to grow, especially given the fact that a majority of baby boomers say they haven’t saved enough for retirement. For most Americans, their home purchase is the largest financial investment they will make, and many older homeowners will see the advantage of a reverse mortgage to boost their retirement savings. LOs that make these additional offerings readily available to their customers – as long as they are easy and affordable to originate – will reap the benefits. It may seem daunting, but with the right tools, it can be quite simple.
2. Tap into the latest technology to simplify the loan origination process.
The combination of decreased volume and reduced staffing has put a heavier burden on remaining LOs to do more with less. They’re having to tackle new skills and become a Jack, or Jill, of all trades in order to do well in this market. That requires a loan origination system (LOS) that leverages the latest in technology to simplify the process since many don't have the luxury of time. They need a system that is simple, affordable, and dynamic and that allows them to quickly generate loan applications and get them submitted to a lender. Industry experts estimate that roughly 80% of LOs only use 20% of their platform, so moving to a more simplified and streamlined system is an efficient and cost-effective solution.
That’s why Zenly is a perfect fit for the new challenges facing LOs. Zenly is a cloud-based loan origination platform that includes all the tools needed to complete a full mortgage application including lead management, document management, and loan submission. It has a built-in point of sale that makes it easy for borrowers to get started from anywhere via a web browser or mobile phone with features like the camera capture option that makes it easy to send and receive documents. Seamless integration with Fannie Mae's Desktop Originator (DO) and Freddie Mac’s Loan Product Advisor (LPA) further simplifies the process. The best part about Zenly technology is that LOs don’t have to be tech-savvy to use it. Like the best tech-based solutions, Zenly has an intuitive design that’s easy to use and makes doing business simple and straightforward.
3. Cultivate and manage a robust lead generation pipeline.
Lead generation is more important than ever before. And it isn’t just one-time lead gen activity that will yield the best results. Playing the long game with lead generation requires patience, but will pay off in the long run. Many potential buyers are sitting on the sidelines waiting for rates to come down and/or inventory to increase. As buyers become more accepting of higher interest rates, LOs who have cultivated their prospect lists and effectively managed their customer databases will be in a good position to help a buyer when they’re ready to move forward. And as rent rates continue to rise, mortgage rates become even more attractive. Experience shows that homebuyers will follow an LO even if they change companies. There’s a real loyalty factor at play and experienced LOs know how to capitalize on this loyalty to encourage lifetime customers. Zenly’s lead generation tool simplifies the process and helps LOs build customer relationships, grow their business, and decrease the time to close by converting leads to loan applications with the click of a button.
For more information on how to simplify loan origination to be more competitive, click here.