Growing Your Mortgage Lending Business in a Purchase Market


Growing Your Mortgage Lending Business in a Purchase Market

September 19, 2022
Certified Credit

The mortgage market has experienced many changes in recent years. In 2020 and 2021, the demand for refinances surged, thanks to the historically low interest rates.[i] During this time, many mortgage lenders enjoyed abundant revenues.

Today, the mortgage landscape is quite different. With a looming recession and rapidly rising interest rates,[ii] refinance requests have waned. What’s more, a low housing inventory and steep prices have led to fewer and fewer mortgage applications as homebuyers “wait out” the market. Due to these significant shifts, many mortgage lenders are facing shrinking business prospects and dwindling revenues.

If you’re wondering how you can grow your business in this tough purchase market, you’re in the right place. Below we’ll offer five tips to tailor your mortgage business to the current market conditions.

#1 Highlight Your Home Equity Line of Credit (HELOC) Offerings

As home values climb,[iii] so do homeowners’ tappable home equity. In 2021, the average homeowner had a record high of $216,900 in tappable equity.[iv] Many homeowners may want to access this equity to pay for various expenses.

In the past, cash-out refinances were the go-to borrowing tool for extracting money from home equity. Not only did they unlock cash, but they also gave homeowners a chance to reduce their interest rates. Since mortgage rates are on the rise right now, cash-out refinances are no longer as desirable. As a result, HELOCs are quickly taking their place instead.

HELOCs can help homeowners refinance their debts and pay for emergency expenses and they’re also fantastic tools for funding home renovation projects. Due to the limited housing inventory, many homeowners may prefer to upgrade their current home than move to a new one. For these reasons, you may want to offer HELOCs in your suite of loan products if you’re not already.

How to Enhance Your HELOC Workflows

If your mortgage lending business is new to HELOCs, you can enhance your HELOC workflows with the following tools:

      • Portfolio Review – At Certified Credit, our Portfolio Review can scan the health of your database of customers and applicants to identify potential risks.
      • Customizable credit reports – Our comprehensive suite of credit reports can help you assess HELOC applicants’ creditworthiness efficiently and cost-effectively.
      • Automated valuation models (AVM) – AVMs are computer programs that use home databases to estimate the value of a property. AVM estimates can be completed much faster than traditional home appraisals. At Certified Credit, our AVM generates statistically verified results so you can accurately assess the value of your borrowers’ homes in record time.
      • Flood and risk support – With FEMA’s ever-changing Flood Zones, staying up-to-date on your applicants’ property’s flood risk is essential. Our Flood Zone Determination tool can help you find out if a HELOC property is currently located within a flood zone using the most updated data. It also features flood zone status monitoring for your current borrowers.

With these types of tools, you can approve the right HELOC customers and verify their assets quickly.

#2 Take Advantage of Automated Lead Generation & Customer Retention Tools

Regardless of market conditions, having reliable lead generation and customer retention tools at your disposal is crucial. One easy way to identify borrowers who are in the market is to use Cascade Alerts, an innovative customer retention tool.

Cascade Alerts uses automated credit monitoring to help you identify leads from your past and existing customer base. It monitors your customers’ credit profiles continuously to find out when they’re in the market for new mortgage loans. As soon as potential leads are identified, you can be notified within 24 hours via text, email, or LOS notification.

Once you receive a new lead list, you can reach out to your hard-earned customers right away and increase your chances of securing their repeat business. In turn, you can improve your customer retention rate and revitalize your revenues.

Another automated solution coming soon to the Lead Generation space is Cascade Leads. Cascade Leads can help you attract high-quality leads using precise, targeted marketing campaigns. It gives you access to the data-driven insights you need to construct the ideal messaging for each segment of your target market. By concentrating your efforts on the leads that fit your eligibility criteria and are actively shopping for a mortgage, you can optimize your marketing ROI with ease.

#3 Establish a Niche For Multi-Family Lending

As the mortgage market shifts, you may want to set your sights on new pools of potential borrowers. One worthwhile market to focus on is multi-family property investors. According to the National Apartment Association,[v] multi-family rental rates are at record highs. As a result, many savvy borrowers are purchasing multifamily units.

You can take advantage of this trend by positioning yourself as an expert in multi-family lending. To do so, simply create content online regarding the rules and regulations of multi-family mortgages. For instance, you can educate your potential borrowers on:

      • The definition of a multi-family property
      • The eligibility criteria for multi-family property mortgages
      • Whether or not projected rental income can be used to qualify for these types of mortgages
      • The underwriting guidelines for multi-family homes versus single-family homes
      • The impact of living in a multi-family home versus renting out all of the units
      • The value of getting tenants to help pay down a multi-family mortgage
      • The potential tax advantages of living within a multi-family investment property
      • How to manage tenants, repairs, and maintenance as a landlord

You can explore these topics in blog articles, Youtube videos, or LinkedIn posts. As investment-minded borrowers stumble across your content online, you can simultaneously position yourself as the right lender for the job.

#4 Re-Evaluate Your Existing Workflows

If your business is experiencing some downtime at the moment, you have a unique opportunity to upgrade your business processes. Revamping your internal workflows can help you maximize your profits during slower times and supercharge your success during future surges.

Here are a few questions you can ask yourself to identify areas of potential workflow improvements:

      • Can you eliminate any processes in your current workflows?
      • Can you consolidate any tasks to streamline your workflows?
      • How many of your workflows require manual labor?
      • Can you automate any of these workflows instead?
      • Are you pulling credit at the optimal time in your mortgage manufacturing?
      • When are you starting the VOE process? Is it too early?
      • How can you ensure that undisclosed debts don’t lead to fall out?

As you answer these questions, you can start searching for the right solutions to set your business up for future success.

#5 Employ Automation

On average, mortgage lenders invest around 65% to 70% of their earnings into labor costs.[vi] Not only is this manual work expensive, but it’s often inefficient and error-prone. By automating more of your manual workflows, you can allocate less of your business budget towards labor and enjoy enhanced efficiency.

Here are some of the automation tools we offer at Certified Credit:

      • Cascade Alerts – As we’ve discussed already, Cascade Alerts is a helpful lead generation and retention tool that harnesses the power of automation to deliver you qualified lead lists on a silver platter.
      • Cascade Prequal – Many of your potential leads may want to find out if they meet your eligibility criteria without impacting their credit scores. You can let them do just that by offering automated prequalification on your website.Cascade Prequal is an automated prequalification tool that can integrate seamlessly with your customer-facing website. After customizing your eligibility criteria and credit report preferences, your leads can find out if they qualify with you on the spot while safeguarding their credit scores. Best of all, you can enjoy the cost savings of using soft pull credit reports in place of expensive tri-merge credit reports.
      • Cascade Verification of Income and Employment (VOE) – Once an applicant has decided to fill out a formal application with you, it’s time to verify their income and employment history. Mortgage application fraud is still a pervasive issue, so you can’t afford to skip this step. Fortunately, it doesn’t need to be cumbersome or time-consuming when you use Cascade VOE™. Cascade VOE is an automated VOE solution that cycles through a customizable cascade of vendor partners. It automatically reaches out to your preferred vendor partners one by one until it fulfills your VOE request, saving you time and standardizing your VOE workflows considerably.
      • Cascade Undisclosed Debt Monitoring (UDM) – Undisclosed debt is another concern you have to take into account during the loan origination process. Undisclosed debt includes any new loans or large credit card balances your applicants incur after their initial mortgage applications. If their debt-to-income ratios increase notably during this time, they may no longer qualify for their loans upon closing.You can prevent untimely surprises by monitoring your borrowers’ credit reports from the time of application through closing using Cascade UDM. This automated credit monitoring tool can alert you of any notable credit file changes immediately, ranging from new tradelines to sudden payment increases. In turn, this tool can improve your LQI compliance and minimize costly fallouts.

Automated tools like these can streamline your business’ expenses and set it up to thrive, regardless of market conditions and fluctuations in revenue.

Partner with Certified Credit to Grow Your Mortgage Business Today

As a leading mortgage solutions provider, we know what it takes to keep a mortgage business afloat during tough times here at Certified Credit. By implementing some of our solutions, you can sustain your business growth, no matter what the market throws at you next.

To learn more about our products and services, schedule a credit consultation with our team today. We would love to customize a set of solutions for you to meet your unique mortgage lending needs.



[i] Rocket Mortgage. Historical Mortgage Rates: 1971 To The Present.

[ii] Bloomberg. Fed Hikes 75 Basis Points; Powell Says 75 or 50 Likely in July.

[iii] CNN Business. Home prices hit an all-time high, even as sales continue to slow.

[iv] FOX Business. Tappable home equity rises to a new record high.

[v] National Apartment Association. Rent Growth Hits Record Levels.

[vi] HousingWire. How lenders can improve business models in 2022.