In many ways, this year was a tough one for the mortgage industry. The refinance boom came to an end, interest rates soared, and mortgage lenders struggled to maintain the same level of business they enjoyed in 2021.
This year was also characterized by exceptional technological advancements and collaborative problem-solving. Thus, there are still many reasons for mortgage lenders to look forward with optimism.
As 2023 approaches, you may be reviewing your current business strategies and looking for areas of improvement. To help you through that process, we decided to compile a list of our top ten articles from 2022.
Mortgage technology has advanced exponentially in recent years. By implementing cutting-edge tech trends, mortgage lenders can enhance their business operations and gain a competitive advantage.
Some of the top tech trends we saw in 2022 include:
- Strengthening fraud prevention and risk management through AI
- Enhancing identity protection using blockchain and biometrics
- Streamlining workflows with customizable credit reports
- Automating key loan manufacturing processes
- Integrating various tech solutions via API
These are just a few of the tech trends that savvy mortgage lenders should know about. You can learn more about them in detail here.
Speaking of automation, employing it in your VOE process can enhance its efficiency significantly.
VOE helps you prevent mortgage fraud and sell your loans on the secondary market. Unfortunately, manual VOE can require a lot of time and attention, taking away from your other tasks. It can also cause loan closing delays if you have trouble tracking down an applicant’s employer or verifying the authenticity of their documents.
Prequalification lets aspiring homebuyers know whether or not they meet your basic lending criteria. It also gives them an idea of the type of loan they can qualify for. Prequalification differs notably from preapproval because it doesn’t involve a costly hard credit inquiry or rigorous application process.
Offering prequalification to your new leads has many benefits. For instance, it can:
- Channel more leads into your sales pipeline
- Reduce your reliance on costlier tri-merge credit reports
- Offer leads insight into their creditworthiness without impacting their credit scores
- Show leads their loan options so they can tailor their home search accordingly
- Help you identify leads that could benefit from credit score improvement tools
Mortgage fraud has always been a concern, but it’s only becoming more frequent and expensive.[i] That’s because fraudsters are carrying out their schemes at alarmingly successful rates.
To protect your business against mortgage fraud, you need to be aware of the current trends. Mortgage fraudsters have increasingly focused on:
- Application misrepresentations, such as income and employment fraud[ii]
- Wire fraud
- Phishing attacks
- Social engineering schemes
- Malicious bots
One of the most effective ways to combat these types of fraud is to have rigorous verification workflows in place. We offer a host of fraud prevention tools that can safeguard your business at Certified Credit. Click here to learn more about them.
Many people don’t understand credit scores or how they work. You can fill in these gaps for your applicants by producing educational content online and explaining pertinent topics during your in-person meetings.
For instance, you may want to shed some light on the following concepts:
- Tri-merge credit reports – Tri-merge credit reports combine data from all three of the credit bureaus’ credit reports into one, giving mortgage lenders the most comprehensive look into their applicants’ creditworthiness. Borrowers should know that tri-merge credit reports are the gold standard used during mortgage applications.
- Mortgage credit scores – Borrowers often review their consumer credit scores before applying for mortgages, only to be confused when their mortgage applicants list another score instead. You can prepare borrowers by letting them know what their mortgage credit score is and how it’s calculated.
- Alternative credit data – Alternative data includes any type of credit data that isn’t used in traditional credit reports, such as rent payments, utility payments, bank account information, and other consumer-permissioned data. Many consumers want to enhance their credit scores using this type of data. Unfortunately, mortgage credit scoring algorithms rarely take alternative credit data into account.
- Rapid rescores – Rapid rescores enable mortgage lenders to update their borrower’s credit reports in an expedited time frame. In doing so, they may help borrowers resolve disputes or increase their credit scores by a few points sooner than later, enabling them to pursue time-sensitive home purchases.
Want to brush up on your knowledge of these topics before you pass it down to your borrowers? Reading our Credit Scores 101 article can help you do just that.
Another topic that borrowers may not know about is undisclosed debt. Undisclosed debt is any debt that a mortgage applicant takes on during the “quiet period.” This period occurs between the initial credit pull and loan closing.
If a borrower incurs too much debt during this time, it could push them past your debt-to-income thresholds and make them ineligible for their loan. Unfortunately, many borrowers apply for other loans or rack up balances on their credit cards during the quiet period without realizing its impact on their eligibility. For this reason, it’s a good idea to educate your borrowers about the dangers of undisclosed debt.
You can also protect yourself against last-minute fallouts by employing undisclosed debt monitoring (UDM). Our automated UDM tool, Cascade UDM, can monitor your applicants’ credit reports throughout the quiet period and alert you of any noteworthy changes within 24 hours. You can learn more about Cascade UDM and its many benefits in this article.
During challenging mortgage markets, the right technology stack can make all of the difference. Here’s why:
- Technology can speed up application processing and loan manufacturing times, enhancing your customers’ experience
- Technology can help you make data-driven lending decisions and mitigate risk
- Some tech tools can even help you boost your customer retention (like Cascade Alerts)
As you can see, technology can give your mortgage lending a competitive edge during challenging market conditions. If you want to explore the transformative tech tools we offer at Certified Credit, check out our full-length article here.
Put simply, workflow optimization is the process of optimizing your workflows, whether that’s speeding up inefficient processes or finding more affordable ways to complete certain tasks.
By optimizing your workflows, your business can operate more smoothly and profitably.
Here are the steps involved in workflow optimization:
- Review your current workflows
- Analyze their inefficiencies
- Identify areas for improvement
- Implement effective solutions, such as automation
When you have a lot on your plate, working through these steps can be overwhelming. That’s where workflow optimization experts, like Certified Credit, can come in handy. Click here to find out more about our workflow optimization solutions and strategies.
As we mentioned earlier, offering prequalification is a powerful lead generation tool. Better yet, it’s easy to do when you have an automated solution, like Cascade Prequal.
With Cascade Prequal, you can meet modern mortgage applicants’ expectations for a digitized application experience and quick response times.[iii] That’s because Cascade Prequal enables you to:
- Invite applicants to fill out prequalifications on your customer-facing website
- Provide applicants with instant prequalification responses
- Reduce your credit report costs by using more soft pull credit reports
- Remain in compliance every step of the way
Cascade Prequal also opens the door for valuable customer-nurturing opportunities. For instance, if an applicant’s credit score is on the cusp of qualifying with you, you can help them boost it over time using our credit score improvement tools.
Want to learn more about the power of prequalification and its ease of implementation? Click here.
With over 40 years of experience, we understand how valuable relationships are in the mortgage industry. So why do relationships matter so much? Here are a few reasons:
- Mortgages are ultimately about getting real people into homes
- Mortgage origination relies on a vast network of professionals
- Mortgage industry challenges are best solved through collaboration
Since relationships are so fundamental, we recommend that all success-minded mortgage lenders invest time in networking, attending mortgage events, and providing exceptional customer service.
If you ant to enhance your awareness of the importance of relationships in the mortgage industry, this article can help.
Enter 2023 With a Partner That’s Dedicated To Your Success
As you can see, we explored a wide variety of topics this year. Hopefully, some of these articles can help you hone your business strategies going forward into 2023.
If you want to take on this coming year with confidence, it helps to have a partner by your side. Certified Credit can play a vital role in your future success, thanks to our innovative mortgage lending solutions. We offer the following types of products and services:
- Automated loan manufacturing solutions
- Lead generation tools
- Affordable credit reports
- Flood zone determinations
- Fraud and risk support
- Settlement services
Interested in partnering with Certified Credit? Schedule a credit consultation with our team today.
[i] National Mortgage News. 4 trends in mortgage fraud to watch out for.
[ii] Fannie Mae. Mortgage Fraud Tip Trends.
[iii] McKinsey & Company. Competing on customer experience in US mortgage.