Both
While both are important, referral-driven business is slightly higher on the ladder, said Jessica Peterson, a former mortgage loan officer who is now on the real estate sales side of the transaction.
Even younger consumers,
"They want to get to know you," Peterson said. "For example, today, I have someone to meet with and she's like, 'Oh my god. I'm so excited. I did research on you and I found all this stuff...The future is more of the
On the other side of the argument, there's Gregg Harris, a mortgage broker who has created a consumer-facing product and pricing marketplace under the LenderCity brand. It has partnerships for its services with Mortech (owned by Zillow); Loansifter,
"This is an idea I've had for a long time," Harris said. "So coming from a broker background,
It is a lower-cost way for small companies to generate leads from consumer self-service activities.
"I feel like I am the first lead aggregator to really make this a level playing field for the brokers," said Harris, although lenders can participate on the site. It is also offering geo specific targeting, because even though technology allows originators to operate anywhere they are licensed, most consumers are more comfortable working with someone who is local to them, especially in a purchase market, he continued.
It all starts with the borrower, but these tools can help drive business for all participants in the real estate food chain, not just the originator. Harris said.
However, relying on referral business might be difficult in a shrinking market.
"One of the things I've been reading on LinkedIn lately is if you're a broker, cast a wider net," Harris said. "Don't just sit around and wait for your referral sources in your business, you've got to be on some platforms where you're visible."
In reality, this dynamic could go in a number of different directions, said Ruth Vogt, branch sales manager for Fairway Independent Mortgage in Colorado Springs, Colo.
"I think it's an age-old issue that many loan officers have struggled with, whether they're in the broker world, the banker world or independent, I think there's always been that question of what really does drive the business?" said Vogt. "In my thought process, I don't know that it's an either-or, it's got to be a good solid combination of both, the company support as well as the loan officer driving the referral sources in."
But a loan officer that relies entirely on their company providing them leads are likely not to create that personal interaction with clients and sources.
Vogt compared it with getting airline tickets from a website and the only contact for questions is a chatbot, which may or not provide a proper response.
"The consumer is going to want to go to the person that's going to give them the personal hand holding, because of the complexity, whether it's consumer tools or mortgage lending," Vogt said.
The value proposition of the loan officer is the interactions she or he has with various referral sources.
"It's always got to be about the relationship," said Vogt. "Because without that relationship, then you've just reduced yourself down to nothing more than dollars of a transaction."
LenderLogix is a technology company offering mortgage automation software and application programming interfaces.
Items like a point of sale online loan application that many companies put on their websites are seen by those firms as being done for the loan officer's benefit, to make their life easier, said Patrick O'Brien, LenderLogix CEO.
In turn, the loan officer can use these tools to enhance their referral partnerships.
"You can see loan officers out there talking about this type of technology as improving the experience for the Realtor," O'Brien said.
Lenders are competing with the Rocket Mortgages of the world. "Rocket's really done a good job of using the technology as the selling point," O'Brien said. "In order for lenders to do that, those decisions really need to be made at the corporate level."
In a business where not all that long ago, relationships were created and maintained by walking into real estate offices carrying a box of donuts and a pile of rate sheets, technology can make the difference.
It allows originators to provide an Amazon-like experience so they can compete against large companies like Rocket, O'Brien said.
Mortgage companies are now investing in technology, a change that is overdue, said Melissa Sike, vice president of enterprise sales at Mobility Market Intelligence.
Maximizing the return on investment is the priority, she said. Companies must speak with their tech vendor in order to get the most out of the system. In turn, the tech vendor must articulate the ROI its product brings to the lender.
"When companies invest in tools that LOs need to succeed, LOs want to work for them, so having a best-of-breed tech stack right now, supporting that and demonstrating that, can really work into a company's successful recruiting strategy," Sike said. "If companies aren't investing in their loan officers, and they're backing off right now, somebody else is going to do that, and the loan officers are going to go somewhere else."
The right technology, with company-supplied tools, can bring the loan officer-referral partnership to the next level.
"LOs know the value of referral partners," Sike said. "But having the necessary insights to go back to those referral partners with all of the data, knowing who else they work with, knowing what kind of deals they're involved with, what areas they're doing business in and having all that information, I think helps loan officers have a much more productive conversation and in return a more productive relationship."
The data lets the loan officer go out and target the top producing real estate brokers and offices.
People in the industry are looking to have these conversations with companies like MMI right now.
"Our customers are turning more companies into partners than they were before," Sike said. "We're seeing more collaboration and more sharing," discussing where lenders might have fat in their tech stack and maybe where resources can be reallocated.
Ultimately, it is the relationships with vendors, referral sources and with customers, that are key, Vogt stated.
However, "what frightens me the most about where our industry is headed is that by taking shortcuts and getting lazy, we are jeopardizing our future livelihood," Vogt said.
The mortgage industry can't opt to take the easy path out. "It still has to go back to getting out there and doing the work that's been proven decade after decade on what's important and that's relationship building," Vogt declared.
A campfire song she learned in Girl Scouts was about making new friends while still keeping your old ones. The new friends are silver and the other is gold.
"Which one is your database? Is it the silver? Or is it the gold? But for goodness sake don't forget the gold because you're so focused on the sunny silver that you overlook your database," said Vogt.
