Certified Credit’s ICE Mortgage Experience 2023 Recap
This year, Certified Credit attended the 2023 ICE Mortgage Experience. This conference draws thousands of mortgage professionals and industry experts from across the country.
During the event, we had the pleasure of speaking to many mortgage lenders and listening to keynote speaker panels. These discussions shed light on the current challenges faced by mortgage lenders and the best solutions for tackling them throughout the remainder of 2023.
In this article, we’ll share some of our key takeaways from our time at the ICE Mortgage Experience. We’ll also provide some actionable steps you can take to set yourself up for success in 2023.
What Are Industry Experts Predicting For the Rest of 2023?
So far, 2023 has been a rocky year for mortgage professionals and borrowers alike. Lenders have faced sluggish market conditions, while homebuyers have been up against high interest rates and low housing inventories. So, as we look ahead, what’s next?
Here are four notable takeaways from our ICE Mortgage Experience:
#1 Borrower Expectations Are Evolving
Just as market conditions change over time, so do borrowers’ expectations. Today’s borrowers are made up of a growing portion of Millenials, Gen Zs, and minority groups.[1] Compared to borrowers from decades past, these demographics have different needs, concerns, and expectations.
Here are some strategies that mortgage lenders can use to satisfy borrower expectations in 2023:
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- Find ways to make the home-buying process more affordable – Due to the low levels of inventory, housing prices have quickly outpaced borrowers’ incomes. This has led many Americans to give up on their dream of homeownership, at least for the time being.
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Despite rising home prices, homeownership is more attainable than people think. For instance, many people assume that you need to save up a down payment of 20% to purchase a home. These days, this isn’t the case. Some loan programs allow for down payments as low as 0% to 3.5%.[2] There are also many down payment assistance programs available. Educating borrowers on their options can help them reach their dream of homeownership sooner than expected.
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- Consider the needs of underserved and unserved communities – While many borrowers lack education about home buying and mortgages, this is especially true for those who come from underserved and unserved communities.
Reaching borrowers who come from communities where homeownership is rare may take a little more effort on your part. However, if you’re willing to establish relationships with them and earn their trust, it can be well worth it.
Once you’ve forged relationships with underserved borrowers, you can start bringing their lending education up to speed and bridge that generational knowledge gap. After that, you can hopefully win over these borrowers’ business when they’re ready to buy a home.
- Build relationships for life – If you want to inspire loyalty in your borrowers, you need to take a big-picture approach to your relationship building, especially with those applicants who may not fit your typical criteria right off the bat.
For example, maybe an applicant applies with you and they don’t meet your criteria. Rather than telling them “no,” you can say “not yet” and explain how they can improve their creditworthiness so they can qualify with you in the near future.
Here at Certified Credit, our credit score improvement tools can generate customized suggestions for these types of applicants. By helping your non-qualifying applicants become mortgage-ready, you can become their go-to lender for years to come.
- Prioritize transparency throughout the lending process – During the ICE conference, many speakers highlighted the fact that borrowers value transparency and fairness from their lending professionals. You can enhance your transparency by:
- Explaining the mortgage lending process to your borrowers from start to finish
- Being clear about all of the costs involved
- Updating your borrowers on your progress
- Educating borrowers on any relevant laws or regulations
- Consider the needs of underserved and unserved communities – While many borrowers lack education about home buying and mortgages, this is especially true for those who come from underserved and unserved communities.
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Our First-Time Homebuyer Guide is an awesome resource that you can share with your borrowers to educate them about home-buying basics. You can download it here.
#2 Origination Costs Are On The Rise
The next thing we learned at the ICE Mortgage Experience is that lenders are struggling with rising origination costs. According to a survey conducted by ICE Mortgage Technology, the average loan origination cost in 2022 for Encompass users was as follows:
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- Q1 – $8,700
- Q2 – $9,600
- Q3 – $9,800
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As you can see, these costs are steadily increasing. Even so, Encompass users still enjoy lower costs than most mortgage lenders. The average MBA index shows that origination costs jumped from $10,600 to $11,000 in Q3 of 2022 for mortgage lenders at large. Current reports for Q1 of 2023 say that loan origination costs are potentially as high as $12,000 per loan. These rising costs aren’t just a concern for lenders—they can induce serious sticker shock for borrowers when their closing costs are finally calculated.
Take Steps To Lower Your Loan Origination Costs
You can make your mortgages more affordable by reducing your loan origination costs. Here are some tools that can help you achieve cost savings in 2023.
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- Cascade Verification of Income and Employment (VOE) – Verifying applicants’ income and employment is a critical step in originating a loan. However, if it’s completed at the wrong point in your lending process, it can inflate your costs. The reason? Paying for applicants’ verifications too early can be a waste of money if you later discover that they don’t meet crucial eligibility criteria. Meanwhile, waiting too long to conduct VOE can increase your costs by prolonging your origination timeline.
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You can streamline your expenses by using an automated VOE tool, like Cascade VOE. It allows you to hand-pick a selection of third-party and consumer-permissioned vendors. After that, you can arrange these vendors in your preferred order. By positioning low-cost vendors early on in your cascade, you can save money on your verifications.
Once you’ve customized your cascade, Cascade VOE can cycle through it every time you initiate a verification request. You’ll be notified as soon as Cascade VOE returns a hit. Not only can automating this process make it more cost-effective, but it can also enhance its consistency.
You can lower your VOE costs even further by using Cascade VLOE alongside Automating Service Ordering (ASO). ASO lets you automate new loan processes as soon as certain loan conditions are met.[3] For example, you can trigger Cascade VOE to initiate verifications as soon as an applicant is determined to be at minimal risk of fallout.
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- Cascade Alerts – Trying to attract more borrowers in a tough market can feel like an uphill battle. To get more business, you may be considering ramping up your advertising budget. Rather than doing that, you can acquire more qualified leads affordably using Cascade Alerts.
Cascade Alerts monitors your past and present clients’ credit reports and lets you know which ones are actively applying for new mortgage products. You can capitalize on this insight by calling them and asking how you can assist them with their lending needs. Since you already have a relationship with these borrowers, you may be able to convince them to ditch your competition and work with you again instead. As an added bonus, Cascade Alerts can integrate with Velocify, which is a robust lead management software offered by ICE Mortgage Technology.[4] If you use these tools in conjunction with one another, you can monitor new leads’ data from one place.
- Cascade Alerts – Trying to attract more borrowers in a tough market can feel like an uphill battle. To get more business, you may be considering ramping up your advertising budget. Rather than doing that, you can acquire more qualified leads affordably using Cascade Alerts.
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As these automated solutions free up your time, you can reinvest into more valuable endeavors, such as building relationships with borrowers and transforming them into customers for life.
#3 Don’t Pass Up Prequalification
As we spoke with mortgage lenders at the conference, we quickly discovered that many of them have yet to offer prequalification. Many lenders report that the stringent regulatory requirements are what’s holding them back. While regulations can certainly make prequalification more complicated, forgoing it may be doing your business a major disservice. That’s because prequalification can serve as a valuable marketing tool.Borrowers often seek out lenders who offer prequalification because it helps them understand which loan programs they can qualify for. Better yet, it can help them clarify their creditworthiness without hurting their credit scores.
Meanwhile, prequalification can help lenders initiate relationships with prospective borrowers without alerting their competition. Since housing inventory is so low right now, the typical home search is taking longer than it did a few years ago. Thus, avoiding trigger leads is more vital than ever before if you want to keep your leads to yourself.
Overcome Regulatory Hurdles With Cascade Prequal
Cascade Prequal is an automated prequalification solution that can eliminate the compliance struggles from your prequalification process. It’s been officially approved by all three credit bureaus. You can use it to offer online prequalification and provide immediate responses. All you have to do is customize your credit criteria and credit bureau preferences.
Applicants who prequalify with you can be nurtured into customers with the right relationship-building techniques. Applicants who are on the cusp of qualifying can be guided toward creditworthiness using the credit score improvement tools discussed above.
#4 Now is The Ideal Time to Innovate
Our final ICE Mortgage Experience takeaway is that this slow market offers a unique opportunity for mortgage lenders to innovate their tech stacks. After all, lenders currently have fewer distractions than they did when business was booming.
By investing in new solutions now, you can enjoy a significant return on that investment when the market picks up again. However, you don’t have to uproot your entire lending infrastructure all at once. Simply make incremental improvements to your processes. Even small adjustments can lead to lower origination costs, faster loan cycle times, and an improved borrower experience.
You also don’t need to tackle your technology updates on your own. Enlisting the support of a trusted vendor partner can make the process a lot easier and more efficient. For example, at Certified Credit, we can evaluate your lending processes and learn about your pain points. After that, we’ll steer you toward the solutions that can make the biggest impact on your bottom line.
Improve Your Mortgage Lending Business With Certified Credit
In summary, our time at the 2023 ICE Mortgage Experience was very enlightening. Attending conferences like this helps us stay on the cutting edge of emerging technologies and understand our customer’s needs and concerns. After each event, we update our priorities accordingly so we can deliver the most impactful mortgage lending solutions.
If you want to improve your business using our innovative products and services, schedule a credit consultation with Certified Credit today. In addition to our Cascade and credit score improvement tools, we also offer:
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- Automated undisclosed debt monitoring
- Affordable tri-merge credit reports
- Refresh credit reports
- Flood zone determinations
- Fraud and risk support
- Settlement services
Want to learn more about our 2023 ICE Mortgage Experience takeaways? Listen to this episode of our Talk Data to Me podcast.
Sources:
[1] National Association of Realtors Research Group. 2022 Home Buyers and Sellers Generational Trends Report.
[2] Bankrate. How much is a down payment on a house?
https://www.bankrate.com/mortgages/how-much-is-a-down-payment-on-a-house/
[3] Encompass Partner Connect. One-Click and Automated Service Ordering.
[4] ICE Mortgage Technology. Velocify.
