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How Mortgage Lenders Win With Data

Mortgage lenders are using data to gain an edge in closing more high-quality home loans.

The battle for market share is nothing new in the mortgage lending business. However, as lending standards have become more stringent and home loan volumes have diminished since the housing market heyday, smart mortgage lenders are turning to data to obtain an advantage in this highly competitive market. Data is helping mortgage lenders in a multitude of ways, including:

  • Originating more loans
  • Increasing customer engagement
  • Providing customer and market intelligence
  • Driving high-quality loans
  • Obtaining recorded documents

Competitive mortgage lenders are using data insight throughout the mortgage process to increase their market share of new home loans while improving mortgage quality an imperative for lenders in the post-boom mortgage market.

Boosting Loan Originations With Insight

Lenders are increasingly using data to aid the loan origination process, both for current customers and non-customer prospects. At most banks and credit unions, loan officers are able to electronically pull up customer information including any product history with the institution before approaching a customer.

But that only tells a part of the story, particularly when many customers keep accounts with other financial institutions. So, rather than going into a customer call with simply an address, name and a list of current financial products the customer has used, loan officers with data-savvy lenders are now supplied with property and borrower data which allows them to better understand the customer’s situation.

With the name and address of a customer, a loan officer can view the subject property and surrounding area, current ownership and liens on the home if applicable, approximate property value, and recent sales in the area. This information prepares the loan officer to have a more effective conversation with a customer, and provides a higher likelihood of closing the loan.

Measuring And Enhancing Customer Engagement

Often it isn’t obvious when customers maintain deposits at one institution and obtain other services elsewhere. But it does matter to smart lenders who seek to increase the long-term value of that customer. And a search of the data will reveal this. Smart lenders are data mining their customer databases to help understand and increase their customer’s connection to the lending institution. Does the customer have a credit card? Checking account? Savings account? Certificate of deposit? Personal loan? Auto or home loan?

The more points of connection between the customer and the banking institution, the stronger the relationship, and the more likely the customer will remain to save and borrow there. Many banks and credit unions strive to achieve at least three points of connection in any form to help ensure customer engagement or loyalty to the institution.

Savvy banks and credit unions are using this analysis to help increase their customers’ relationship with them. Customers with too few points of connection are flagged to receive marketing messages and promotions about products that could deepen their connection. Also, these customers are identified for further outreach. And when the customer calls or visits the retail branch, a representative will pull up the customer’s information on screen, mention that that they don’t have a credit card or loan and ask them if they would consider one at that time potentially increasing their points of connection.

Providing Customer, Property, and Market Intelligence

Once a bank or credit union has evaluated a customer’s engagement and identified that the customer does not have a home loan with the lender, it’s important to take the next step to find out the lender that currently has the mortgage. This information as well as important facts about the type of mortgage and any other liens on the property, will provide a better understanding of the customer’s needs and current situation. This insight is available to lenders through two key methods:

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First American offers the data-driven solutions that credit unions need through DataTree.com. DataTree by First American is the property, homeowner and mortgage research solution lenders depend on throughout the mortgage lifecycle from customer acquisition to providing the data, property reports and insight that empower zero defect loans. DataTree is built on the industry’s largest database of property and homeowner information and document images.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
November 2, 2015

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