Great read last week in @Rob Chrisman’s blog from
@Mike Seminari, STRATMOR CX Director.
Are you losing future borrowers by sending them a sub servicer or sell servicing released? Could the experience sour them and cause them to not be return customers. As we like to say, they forget will origination experience and care more about the next 30 years. I saw this and it is spot on.
“According to data from STRATMOR’s MortgageCX program, less than one in every five borrowers returns to their original lender for their next loan. The data indicates that borrowers return more at first (24 percent in the first two years) but then just 15 percent are returning by year five. The severity of the drop over time indicates that once two to three years have passed, the lender and loan officer are out-of-sight, out-of-mind. What can lenders do to ensure a greater frequency of repeat borrowers over the long term? In his latest Customer Experience Tip, STRATMOR CX Director Mike Seminari suggests three ways lenders and loan officers alike can create connections with servicing borrowers and increase retention. Check out, “Always Be One Thought Away for Your Borrowers.”
A serious situation for mortgage lenders
When we sat down to take a close look at the current situation for a new White Paper we just published, the seriousness of the lender’s plight was abundantly clear.
The Mortgage Bankers Association will tell you that of the $13,000 it currently costs to get a loan from application to the closing table, only about 5% of it is spent on technology. We believe that’s true, mostly.
Where we differ is on measuring the lost potential savings that better technology could offer lenders who use it. Yes, those high costs are not technology costs, but better technology could reduce them.
The money lenders spend on technology will play a very large role in determining how much they must spend to originate each loan. That means it’s fair to say that current technology is costing lenders a lot more than 5% of their cost to close.
Using technology to unlock future revenue streams
And that brings us to the conclusion we reached in our new White Paper. Lenders can’t grow on the additional origination business they can attract in this market. So, perhaps they should consider servicing their own loans.
If they aren’t considering this, they are leaving money on the table.
In fact, we argue in our paper that lenders who don’t have mortgage servicing software right now are losing a lot of money. Not because they don’t have the software but because they don’t service loans, so they don’t need it. Plenty of mortgage lenders who don’t have those servicing assets are wishing that they did right now.
Does that mean that NOT buying technology is costing them money? Well, yes. It’s an opportunity cost. If they had invested in the software so they could service loans, they’d have assets producing a return that could offset the origination revenue they’ve been losing.
And now that MortgageFlex has released a companion mortgage servicing platform for its industry-leading LOS, it’s the perfect time to find out more. Download our new White Paper today or call us directly to find out more.