At Certified Credit, we’re proud to have a team of industry experts with diverse backgrounds and expertise. Every member of Team Certified brings a unique perspective to the current market conditions, as well as the best way to succeed amidst its challenges.
To help our mortgage lenders thrive this year, we decided to share our insider insights in our latest series, Executive Fireside Chats. During this series, we’ll interview a different Executive member of Certified Credit, starting with our Vice President of Sales, Paul Robinson.
With over two decades of industry experience, Paul has valuable insights and predictions about the most potent opportunities in the mortgage lending market. Below, we summarize his observations and advice for today’s mortgage lenders.
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Getting to Know Paul Robinson, Certified Credit’s VP of Sales
Paul Robinson has been with Certified Credit for over eight years. Before becoming Vice President of Sales, he served as Certified Credit’s Regional Vice President and Director of Business Development. Along with these roles, Paul has an impressive 23-year career in the mortgage credit space. He’s done everything from processing to operations to technical support.
Paul currently lives in Gilbert, Arizona with his family. As a happily married husband and proud father of four, he understands first-hand how important homeownership can be for growing families. As a result, he strives to support mortgage lenders in their mission to make homeownership more attainable.
Adapting to Change: How Mortgage Lenders Can Win in the Evolving Market
What Niche Markets or Borrower Segments Do You See Presenting the Biggest Opportunities for Lenders in the Current Market Climate?
“Due to the high interest rates and low housing inventory, the current market has been challenging for lenders and applicants alike. Even so, there is still plenty of opportunity for lenders who are willing to look for it.”
In 2024, Paul believes that the most promising niches are NextGens, which encompass Millennial and Gen Z homebuyers, and underserved communities. Here are his recommendations for engaging these two valuable demographics:
How to Approach NextGen Homebuyers
“If you want to attract NextGen homebuyers, you need a strong online presence. After all, Millennials and Gen Zs spend a significant portion of their life online—Millennials clock in around 8.5 hours a day on their devices, while Gen Z surpasses them with an average daily screen time of 10.6 hours.
Paul’s top tactics for gaining these digital natives’ attention, trust, and future business are as follows:
- Curate an authentic brand on your social media profiles.
- Regularly engage with your NextGen audience.
- Provide a digitized lending experience that garners positive peer reviews.
- Cultivate a strong referral network of NextGen buyers.
To achieve these aims, post helpful content on social media on a consistent basis. You can answer young applicants’ FAQs, bust their biggest credit misconceptions, and showcase your personality. And don’t forget to respond to your comments and ask your followers to like and share your content with other young aspiring homebuyers.
Learn More: Enhancing the Customer Experience for Next Generation Homebuyers
How to Approach Underserved Communities
Underserved communities are another up-and-coming demographic in the mortgage market. Around 70% of new homeowners are projected to be of Hispanic heritage by 2040. While NextGens are more likely to scrutinize lenders’ authenticity and online presence, underserved borrowers need help closing their ongoing home-buying and credit education gaps. After all, many underserved homebuyers are the first person in their families to purchase a home.
“Lenders need to engage in outreach and educate underserved communities about the different programs available to them.” Here are some ways to do just that:
- Attend local events in the communities you want to serve.
- Host educational seminars about credit and the home-buying process.
- Refresh your awareness about all relevant housing assistance programs.
- Make sure you have Spanish-language lending materials readily available.
- Cultivate a lending team that reflects your target market’s demographics.
Learn More: Fostering Social Impact & Business Growth: Empowering Underserved Communities
How to Address Today’s High-Rate Climate
“No matter what group you’re working with, today’s applicants all have one concern in common—high interest rates” As of April 18th, the average interest rate on a 30-year fixed mortgage was 7.22%.
Paul’s advice? Quell applicants’ hesitation by reminding them that you “marry the home, and date the rate.” You can also let them know you can reach out to them about refinancing their loan as soon as rates drop to a more reasonable level.
What Innovative Approaches Can Mortgage Lenders Adopt to Assist Individuals With Less-Than-Perfect Credit Scores in Achieving Homeownership?
According to Paul, “Lenders should never dismiss applicants just because their credit score is too low to qualify right away. Instead, they should strive to nurture applicants’ creditworthiness.” To facilitate this process, Paul recommends embracing the credit scoring improvement methods that borrowers already have at their disposal.
For example, you can encourage your non-qualifying applicants to become authorized users or to request credit limit increases to offset their elevated credit utilization. “These suggestions may not be an immediate fix, but they give the borrower a roadmap toward the fastest path to homeownership.”
If you want to take things one step further, you can also invite Certified Credit to review your applicants’ credit files. “We’re the experts, and sometimes a second set of eyes can make all the difference. As we search for improvement opportunities within your applicants’ credit reports, we can explain how the new credit scoring models, FICO 10T and VantageScore 4.0, will impact your applicants’ scores in the coming years.”
Lastly, Paul emphasizes how important it is to advise applicants to pay down their credit card debt. The sooner they start this process, the better. You can ask your realtor partners to promote this practice before they send new applicants your way.
How Can Lenders Leverage Certified Credit’s Technology to Target and Serve New Markets?
Certified Credit offers a wide range of tech solutions that can help you capitalize on new opportunities. We asked Paul which products he believes can help lenders target new markets most efficiently. Here’s what he suggests:
- Portfolio Review – “Portfolio Review is an excellent product to start with. It allows you to identify clients within your existing portfolio who may benefit from a cash-out refinance or HELOC.” In addition to uncovering opportunities to offer new services, this tool can help you spot warning signs that may threaten the health of your portfolio, such as trending late payments or increasing credit inquiries.
- Cascade Alerts – Next, Paul champions the value of Cascade Alerts. “This solution helps you identify when your past and present clients are shopping around for new mortgage products, enabling you to swoop in and secure their repeat business.” Best of all, it can be implemented quickly and cost-effectively.
- Self-Service Solutions – “NextGen applicants like to feel in control of their lending experience and personal data. We have several self-service products that allow them to do just that.” These solutions include:
- Cascade Prequal – Cascade Prequal allows your applicants to see if they prequalify with you in seconds. Once you’ve set your credit thresholds, all you have to do is feature your prequalification application on your customer-facing website.
- Cascade VOE – Cascade VOE is our automated verification of income and employment solution. Along with leading instant VOE vendors, Cascade VOE gives you access to several consumer-permission VOE vendors. When you use these vendors, your applicants can share access to their income and employment data with you directly, giving them a greater sense of control over their data privacy.
- Automated Credit Supplements – Like consumer permission VOE, Automated Credit Supplements allows your applicants to submit real-time tradeline updates using a secure link, eliminating the need to hop on an inconvenient conference call or fax their forms to your office.
In addition to our savvy tech solutions, you can also enlist our support for your educational initiatives. We’ve helped countless lenders set up workshops for aspiring homeowners and realtor partners. We can help educate your target audience or local realtors on everything from credit-building techniques to trigger lead opt-out tactics.
What Are Your Predictions For the Long-Term Outlook of the Mortgage Market?
“So far, the 2024 mortgage market has left a lot to be desired. I suspect that the market will remain in a holding pattern until the Federal Reserve makes some significant interest rate cuts. Inflation is still pretty high, so it’s unlikely that we’ll see a big increase in purchase loans, refinances, or inventory during the upcoming quarters.”
Despite this prediction, Paul is optimistic for 2025. And while a big boon in business may not be on the immediate horizon, he still believes there’s a good chance there will be an uptick in business during 2024’s Q2 spring purchase season.
What Advice Can You Offer for Lenders Regarding the New Soft Pull Requirements & Changes?
“Soft pulls played such an important role in 2023. This year, the changes to the types of soft pulls that can be utilized, along with the recent price increases, have caused many many lenders to rethink how they utilize soft pulls in their loan origination.”
Paul went on to say, “If you’re not going through a GSE program, you don’t need to order soft pulls that contain trended data. I also don’t see the need for anyone to pull a three-bureau soft pull report. After all, Fannie Mae and Freddie Mac both accept one- and two-bureau reports. Forgoing unnecessary trended data and three-bureau reports is an excellent way to keep your costs at bay.”
To finish off our discussion, Paul pointed out how useful Smart Select can be for minimizing soft pull costs. “This tool helps you eliminate unqualified borrowers as affordably as possible. All you have to do is select your eligibility criteria and preferred credit report ordering parameters. From there, Smart Select will order credit reports for your applicants one bureau at a time, only upgrading files for applicants who pass your required thresholds.”
Connect with Certified Credit For More Exclusive Industry Insights
Hopefully, Paul’s insights have given you some practical ideas for seizing the opportunities that exist in today’s market and streamlining your costs along the way. If you want more insider tips, stay tuned for the rest of our Executive Fireside Chats.
While you’re waiting, don’t hesitate to reach out to our team. We can help you craft a roadmap for success and suggest products to expedite your progress. In addition to the tools discussed above, our suite of solutions includes:
- Affordable credit reports
- Automated undisclosed debt monitoring
- Fraud and risk support
- Flood zone determinations
- Property and valuation tools
- Underwriting compliance
- Settlement services
Schedule a credit consultation with Certified Credit to learn more.
