What To Do When The Mortgage Market Slows

by Aidan P

How can you grow your mortgage business and income, even when the mortgage market seems to be slowing and shrinking?

The fact that the mortgage market may be contracting again can be a daunting and scary thing. It’s not something to ignore. The facts are staring mortgage professionals and CEOs in the face. The good news is that we’re better equipped and informed than ever to handle these phases of the cycle.

If you take it head on, with the right strategies and tactics, you can thrive in the months and years ahead. Tackled well, this could be the pivotal period that puts you on top.

Here’s how to do it in 10 steps…

 

1. Know the Mistakes to Avoid

Knowing what not to do is half the battle. Don’t make the same mistakes that have and are putting others out of business. You don’t want to go from what you’ve achieved to lining up with 200 others to beg for a job in a restaurant.

Look out for our upcoming article on the Most Common Mistakes Mortgage Brokers Make During Tough Times, and how to make the right moves.

These include:

Pulling back on mortgage marketing
Reducing service while charging more
Neglecting pivotal investments in mortgage technology
Downsizing the wrong team members
Failing to scale correctly
Falling behind on vendor payments
Failing to have a plan to avoid burnout

 

2. Be Realistic

get real with your goals
Big goals and being optimistic is good. Just make sure you’re basing that on real numbers.

You can’t hit a goal of $1B in origination volume in a city that is only seeing $500M in total loans per year. Not unless you are planning on building and self-financing a whole lot of new inventory yourself.

Do some fresh research. What are the total number of loans and loan volume available in the markets you serve? What is your addressable market share out of that number? Your brand and loan products aren’t going to be a match for every borrower. The competition is going to take at least some of that market share.

 

3. Expand Your Territory

If available loan volume and originations in your current market are shrinking, widen the net.

Expand to new cities, counties, regions, states, price ranges and types of customers. You don’t need all the market share. Just a sliver of a larger marketplace.

Then go back and let all your contacts, referral partners and past customers know. You may have a lot of ripe borrowers in your CRM for these new markets.

If it’s too much for your team to handle, consider franchising and independent branches who will cover any financial costs and additional marketing for growing.

 

4. Get the Right Tech

Get the right mortgage technology
Invest in the right technology to empower you and your LOs to deliver the best service and experience. Price wars may be tough. Lending parameters may contract. Rates may have to go up. Though you can stand out with the process.

Discover how to create the perfect tech stack for your mortgage office here.

Ads and promises are cheap. People will quickly learn who is bluffing and who is the real deal when they start the loan process. They will tell everyone else.

This might be a tough time to implement new and more expensive LOS software across multiple branches. Yet, it may be the optimal time for an affordable upgrade to a better POS software, integrating new digital 1003s, and apps that provide better online and mobile updates to borrowers, Realtors and others in the transaction.

 

5. Add Additional Revenue Streams

This is a great time to expand with new sources of income too. Your mortgage CRM and contact database can be a goldmine for all types of additional revenue. All it will cost you is a couple emails to reach out to them.

Watch the legal side, but look for services that compliment your business. This can generate more income from contacts which aren’t ready to be borrowers right now, as well as dramatically increasing your per loan profits.

This may include insurances, credit building, real estate, investment education, financial courses, home warranties, home improvement services, property management, and plenty more.

 

6. Acquire the Competition

Acquire your mortgage competition
You may not just want to absorb the talent from your competitors, but their market share, relationships, data, databases and customer lists too.

It is a smart time for a lot of others to sell out. Consolidation will come whether they just close their doors and walk away, or they sell and get some cash to walk with. Merge them in or buy them up. You can leverage outside capital to facilitate this and boost the value and liquidity of your operation at the same time.

 

7. Repeat & Referral Marketing

If you really can’t afford to take this moment to make a splash with an aggressive advertising and PR campaign, look to more repeat business and referral marketing. This is the cheapest, easiest and most profitable mortgage business you can do. Own it. Don’t let a loan slip through the cracks.

Make some noise. Stay top of mind. Ask for the business.

Use surveys, automated emails, SMS, dialers, and more to extract all the value you can out of your mortgage CRM and contacts.

 

8. Educate Your Borrowers

Educate Your Borrowers
It’s a confusing time for consumers out there. Give them clarity and confidence. Help them keep making smart and timely financial decisions. Don’t wait for them to try and figure it out themselves or ask the wrong person.

Get out there with your content, blog and social media. Let them know when to strategically refi, even when rates are up. Show them how to avoid default on their loans. How to prepare to be a better home buyer. How to enjoy a smoother loan process. The advantages of buying now versus later.

You should be filling the funnel for next year and the year after this. Your pipeline should already be full for this year. If not – you can’t get ahead. Get moving on this now.

 

9. Know Yourself

Aristotle said “Knowing yourself is the beginning of all wisdom.” It’s even more important to know yourself and your own business than the competition.

Prepare a fresh SWOT analysis and identify your own strengths and advantages in this phase and environment. Know where you are capable of excelling. Identify what you can do and implement to take best advantage of the evolving situation.

Once that’s done look outward. Do market research. Know who else is out there. How healthy are they? How are they likely respond to current market trends? Where will and are they failing customers? Where will they pull back from marketing and leave a void for you to fill?

 

10. Secure the Top Talent

Secure Top Mortgage Talent
Your potential altitude, loan volume and net income is all going to rely on your team.

These are the times in which the survivors are quickly differentiated from the victims of the market by their teams. Be sure you’ve got hot talent in marketing, processing, sales, in the closing department and customer service.

This is the perfect time to take the top talent from your competitors and use them to propel your business. They are going to be scared when the companies they work for start seeing less loans coming in and executives and LOs getting stressed and nervous about their incomes.

Offer them the great opportunity to come work and align themselves with your successful and growing enterprise.

 

Summary

Still worried about a mortgage market downturn? You shouldn’t be. These moves can help you sail through the storm and come out as one of the few leaders in the markets you serve. Put them into play and get into growth mode. Then roll out the red carpet for all the borrowers who are going to need your help as your competition stumbles.

Aidan P
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