LOA N O R I G I N ATI O N
Diversification A TRIED AND TRUE STRATEGY FOR UNCERTAIN TIMES
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ere we all are, halfway through winter, optimistic yet uneasy about what the next several months will bring. Despite the data-driven forecasts and projections, no one really has a handle on what’s ahead. We’ve never seen such a unique and confounding set of variables influencing our business. Purchase demand is high but inventory is so tight that the idea of home sales replacing the refi boom is simply not logical. Student debt is directly impacting the purchase timeline for first-time buyers. Will the anticipated default surge turn out to be a wave or just a big ripple? While the exact circumstances may not be identical, I’ve seen this movie before. And if there’s one thing that gets mortgage companies through uncertainty, it’s the ability to continuously diversify into new product lines and, even more importantly, new relationships. Emphasizing product expansion and relationships sounds like common sense, but after coasting on refinances pouring in without much marketing/sales effort,
By B R U N O PA SCERI, IN CEN TER proactive “friend making” will be far from intuitive for many. It’s time to pay closer attention to: • The products that will meet borrowers’ changing needs • Back-end technology to work smarter and faster • And most importantly, growing relationships within the industry ecosphere to widen your customer base
NEW PRODUCTS
As the industry migrates from a refi to a purchase market, diversification is clearly in order. The pace of first-time homebuying is still strong, and mortgage originations will continue to be an important source of revenue. But price appreciation, inventory shortages, unemployment, and student debt have driven many potential buyers from the market. Companies must diversify their products and engage with a new set of borrowers to fuel continued healthy performance. It’s time, for instance, to reach into the homeowner segment with a broader product shelf. Whether prospective borrowers need renovation mortgages to repair an older home, or home equity loans for a swimming pool, companies
COMPANIES MUST DIVERSIFY THEIR PRODUCTS AND ENGAGE WITH A NEW SET OF BORROWERS TO FUEL CONTINUED HEALTHY PERFORMANCE. 24 MORTGAGE BANKER | FEBRUARY 2021
need to be ready. Purchase reverse mortgages for Baby Boomers planning to downsize could become important sources of revenue, too. Unless companies cultivate and expand their referral networks, their more diverse range of products will stay on the shelf, gathering dust.
ADVANCING CUSTOMER RELATIONSHIPS
Take a moment to assess your relationship ecosphere. Does it include all gateway intermediaries who could send referrals your way? In addition to real estate professionals, how about developers, builders, attorneys, CPAs, and financial advisors? These referral sources are your true customers. If you already have a diverse mix of relationships, how are you proactively supporting the individuals in your network? Could they be wondering where you have been since the pandemic began? Do they know about the new products that you’re highlighting? Develop a new habit: Meet with these people regularly, in person or virtually, to catch up on how you can help one another. Educate them on changes to the buyer and property credentialing process. Empower them to pass qualified borrowers to you. Find ways to expand your referral pipeline, too. COVID-19, ironically, has broken down traditional networking barriers. For the first time, it’s easy to attend some of the breakfast meetings that were arduous to drive to. Pop in, scout out the people in allied professions, and invite them to meet virtually, one
