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Want to capture market share? The new table stakes for 2019

Even amid a year marked by the 10-year anniversary of the financial crisis, a crucial mid-term election and less than predicted mortgage volume, there were still major wins for the housing market in 2018.

So much so that these wins are sticking around and turning into table stakes for 2019. Fail to deliver on these baseline requirements, and it will impact the longevity of your business.

In 2019, technology and customer service are the much-needed fresh take in an industry that’s so transactional. It’s the combination of both of these that will help you grow margins and not waste money in the new year.

Volume. Demand. Margins. Even though these factors aren’t forecasted to change much, there’s still plenty of mortgage market share. It’s simply on you to capture it.

Technology for the lifetime relationship with customers

For the past few years, the industry has hyper-focused on the digital mortgage. What the industry seems to forget over and over again, however, is the 30-year period in which a borrower pays back their mortgage.

It’s one thing to revolutionize the beginning days and weeks it takes to transact a mortgage, but if you truly want to create a fully digital mortgage, it’s going to have to include the years after the closing table that the borrower pays their mortgage. Or as I like to call it, the beginning table.

The more common the digital mortgage becomes, the more borrowers will demand the same level of technology on the servicing side.

For example, Servicers (or subservicers) should be able to harness technology that tracks borrower payments in real-time in order to best assist them in making their payments on time. They should be able to use technology to proactively call on borrowers to prevent delinquencies. They should host features that allow users to download and upload documents instantly. They should benefit from technology that allows them to record and track all interactions with borrowers, so they can quickly help a borrower when they call in.

This needs to be the new normal in subservicing 2019. We know it’s possible because at TMS we deliver on it every day. Our award-winning subservicing platform SIME, Servicing Intelligence Made Easy, provides full transparency into a lender’s loan portfolio in real time, offering reliable and unheard-of oversight tools to help maintain a lifetime relationship with customers.

Customer service matters more than you think

Hear me out on this one. We’re in a tight market, and rather than have customer service as a side project, you need to make it your main focus.

Customer service is one of the biggest costs to produce that you can control. You can’t control interest rates, homebuyer demand, or even new products really, so control what you can control — the cost to acquire a new customer.

In fact, this is an area where most lenders are losing money. According to the NewVoiceMedia Serial Switchers Study 2015, 51% of customers who experience poor customer service would never use a company again.

And the impact goes beyond this. Customers tell an average of 15 people about a poor service experience, according to the American Express 2017 Customer Service Barometer.

Can you afford to lose that one customer, along with the 15 people they may refer to you? Studies show that the customer is going to refi or purchase again in the next 3-4 years and when they do, you want to make sure they’ll come to you. If not, you risk future growth in an already tight market.

Purchase mortgage originations this upcoming year are supposed to increase by 4%, reaching an estimated $1.24 trillion, according to the Mortgage Bankers Association. Don’t miss out on your opportunity to scoop up the trillions of dollars out there by failing to offer technology for the life of the loan and providing terrible customer service. The bar has officially been set for 2019. Don’t miss it by not even getting a seat at the table.

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By Ali Vafai | TMS President
December 11, 2018