The right analytics helps lenders deal with application surge

There is a positive wave sweeping the mortgage industry, fueled by a healthy economy and the lowest delinquencies in 13 years. In fact, a recent CoreLogic report from March showed that the nation's overall delinquency rate has fallen on a year-over-year basis for the past 15 consecutive months. More recently, we've seen interest rates fall to their lowest point in the past year.

All of these factors are increasing demand, with mortgage applications jumping 27% in just one week. Refinances are driving this surge in the short term, while buyers of affordable homes in the $100,000 range are poised to deliver a larger boost as the housing supply catches up.

All of these developments signal that now is the perfect time for lenders to nurture refinance opportunities from their portfolio, as well as capture new refi and homebuyer business — and with the right technology, a savvy lender can achieve these goals with only a minimal investment.

While lower rates will get more consumers thinking about buying or refinancing, they are not the most influential factor in choosing a lender. In fact, only 6% of borrowers shop based on interest rates. Rather, today's borrowers are looking for a highly personalized experience that integrates the entire home buying journey into an organic whole.

Lenders who employ a technology stack that tracks, collects and analyzes homebuyer behavior will have a distinct advantage in the market. With valuable insight into homebuyers’ preferences and intents, lenders can offer them the right loan product at the right time to meet their unique financial needs.

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To illustrate this technology in action, consider the following scenario: A loan officer receives a notification that a past client or lead is actively looking to buy a home. Using artificial intelligence and leveraging available data, the LO's marketing automation tools draft an email tailored to that prospect with updates on the latest interest rates, educational resources, or new loan products that meet the borrower's needs.

With just a few clicks, the LO can easily deliver a highly personalized and timely communication that demonstrates their understanding of that consumer's needs, creating a strong foundation for a potential relationship.

From optical character recognition, to e-signatures, to open banking standards, lenders should invest in their infrastructure to drive increased underwriting efficiency and eliminate traditional pain points in the loan application process.

Loan origination is just a small portion of the overall home purchase. By expanding their offerings to include home search tools, educational resources and Realtor networks, lenders can start nurturing prospective buyers earlier in the process.

Personalizing outreach for each individual borrower can be challenging at scale. Machine learning and AI automate this personalization, helping LOs send the right message at the right time.

While the industry is enjoying an upswing, now is the time for savvy lenders to invest in tools that help them connect with receptive borrowers and build relationships that will create lifelong clients.