With two interest rate cuts and a presidential election, 2024 has been an eventful year for the mortgage industry. The Federal Reserve’s recent rate cuts signal a welcomed shift in monetary policy. However, some of the next administration’s proposed policies may reignite inflation, causing interest rates to climb back up again.
According to Realtor.com’s senior economist Ralph McLaughlin, “While we still expect mortgage rates to stabilize by the end of the year, they will likely be at a higher level than markets were initially expecting prior to election week.”
Current market conditions may be uncertain, but this type of volatility is common in the mortgage industry. Learning how to adapt swiftly, embrace innovation, and invest in the right technology is what separates successful lenders from those who fail to keep pace.
So, how can you leverage technology to stay competitive as we approach 2025? Below, we’ll review four areas to focus on as you optimize your tech stack.
Table of Contents
#1 Enhancing Your Borrower Experience
Whether the real estate market is soaring or stagnating one thing remains constant: your borrowers are the lifeblood of your business. Thus, their experience should be a key consideration as you evaluate new tech tools.
You can satisfy your borrowers by investing in solutions that offer:
- Digitization – In recent years, borrowers’ desire for digitized processes has rapidly increased. While 63% expressed interest in a more digitized lending process in 2021, that number jumped up to 90% in 2024. Homebuyers enjoy digitized processes for their ease (71%) and speed (75).
- Personalization – Over 80% of customers prefer companies that offer personalized experiences, particularly in the mortgage industry. After all, buying a home is one of the most significant financial decisions a person will ever make. Borrowers want to feel as if their lender knows and values them throughout their lending journey. You can provide that personalized experience by offering hands-on support and tailored loan recommendations.
- Automation – Due to the gravity and urgency of their home-buying journeys, many borrowers want immediate responses from their mortgage lenders. Luckily, several tech tools can help you provide this swift support. For example, AI chatbots can answer simple applicant queries on your website or mobile app in real time. Meanwhile, automated solutions can reduce your manual workload, carving out more time in your schedule to focus on customer service.
At Certified Credit, we have many solutions that can help you elevate your borrower experience.
For example, our automated customer retention tool, Cascade Alerts, can identify borrowers within your existing client base who may be seeking a new mortgage product, whether that’s a new purchase loan, HELOC, or refinance.
After receiving a Cascade Alerts notification, you can review what they’re applying for and reach out with a personalized pitch. Along with streamlining your lead generation, Cascade Alerts can enhance your personalization, providing your existing borrowers with a better experience.
#2 Transforming Non-Qualifying Applicants Into Approved Borrowers
In high-interest-rate environments, mortgage applications can be few and far between. Thus, you can’t afford to dismiss applicants simply because they don’t qualify with you just yet. Poor credit or high consumer debt may undermine applicants’ current eligibility, but with the right guidance and support, you can help these aspiring homebuyers enhance their creditworthiness over time.
ScoreNavigator is a powerful solution that can facilitate this process. This tool analyzes your applicants’ credit reports and suggests personalized steps to strengthen their scores. It can also:
- Simulate the impact of various credit decisions, such as closing old credit card accounts.
- Identify which creditors to pay off first to achieve the fastest score improvement.
- Outline what steps to take to earn a specific score as quickly as possible.
By adding ScoreNavigator to your tech stack, you can play a pivotal role in helping your non-qualifying applicants become creditworthy borrowers. Not only can this increase your business prospects, but it can improve borrowers’ satisfaction with your services, boosting the likelihood that they come back to you in the future and refer you to their friends and family.
#3 Streamlining Costs
While the right technology can strengthen your borrower relationships, it can also streamline your operating expenses. Considering that mortgage loan origination costs have surged 35% over the past three years, cutting costs is more important now than ever before.
Freddie Mac found that lenders who fully digitize their mortgage processes reduce their operating costs by up to 40%. If you want to join these lenders’ ranks, consider implementing the following solutions:
- Reliable loan origination software (LOS) – A robust, integrated LOS can streamline many steps within your loan application process. As your centralized platform for applicant information, your LOS can help you streamline workflows, enhance collaboration, and reduce the costs associated with manual data entry errors and inefficiency.
- Digital loan applications – Did you know that 78% of consumers prefer to manage all of their finances online? By offering digital loan applications, you can satisfy this preference and reduce your administrative workload. Cascade Prequal allows you to provide instant, online prequalifications. Better yet, this automated solution sends your applicants’ submission data directly to your LOS. By using affordable one- or two-bureau soft pull reports with Cascade Prequal, you can keep your prequalification costs to a minimum.
- Digital signatures – Digital signatures are a must in the modern lending landscape. These convenient tools eliminate the hassle and expense of printing, scanning, and mailing documents. They also improve compliance, speed up closings, and improve the borrower experience, helping you originate more loans in a shorter amount of time.
- Automated verification of income and employment (VOE) – Income and employment verifications are some of the most time-consuming parts of the lending process. Manual VOEs often involve hours of chasing down employers to request verbal confirmations. Rather than wasting this valuable time, simply employ an automated solution, like Cascade VOE, instead. This tool digitizes and automates your VOE process, enabling you to receive hits in minutes while leveraging cost-effective vendors.
- Digital credit supplements – While vital for underwriting, credit supplements can drag down your efficiency. Rather than relying on faxes or conference calls, Automated Supplements offers a more affordable alternative. This tool lets your borrowers provide their financial information online using a secure link and adds their updated tradeline information to their credit files. By reducing the need for back-and-forth communication, Automated Supplements can slash your turn times significantly.
#4 Proactively Preparing For Market Improvement
In the mortgage industry, the only real constant is change – home prices, interest rates, inventory, and lending regulations are constantly in flux. As these factors evolve, borrower demand follows suit.
The good news? Today’s tough market conditions won’t be here forever. Thus, you should start preparing for the inevitable influx of business before it arrives. This way, you’ll be ready to originate more loans and scale up efficiently.
Along with implementing the tools listed above, you can set yourself up for success by partnering with a trusted credit partner, like Certified Credit. For nearly four decades, we’ve helped mortgage lenders across the country optimize their operations and achieve greater efficiency, profitability, and borrower retention.
Here’s what you can expect when you become a Certified Credit client:
- Personalized workflow optimization audit – Every lending business is different. That’s why we’ll analyze your unique workflows to see which processes could use the most improvement. For example, maybe your manual VOE is cutting into your profitability. After our audit, we can suggest solutions that will provide the greatest returns on investment for your business.
- Cutting-edge technology – At Certified, we’re committed to providing our clients with the best mortgage lending technology available. For example, we designed our Cascade Automation to address the most common inefficiencies faced by lenders, and we also recently partnered with ScoreNavigator to deliver comprehensive credit score improvement solutions. Whether developed in house or provided by a third-party vendor, our solutions are designed to integrate with popular LOS with ease.
- Best-in-class customer support – While innovative technology can help you save time, cut costs, and boost your productivity, so can a dedicated customer service team. At Certified Credit, our team of FCRA experts is committed to your success, from ensuring a smooth onboarding process to providing prompt troubleshooting support. Our team is attentive, knowledgeable, and quick to respond, earning our company the 2024 TMC Award for Best Customer Service. With this award-winning customer support by your side, you can conquer changing market challenges with confidence.
Transform Your Tech Stack With Certified Credit
As you can see, the right lending technology can elevate nearly every aspect of your mortgage lending business. By employing tools that help you enhance your borrower experience, approve more applicants, cut costs, and prepare for changing market conditions, you can secure your success in 2025.
If you want to kickstart this process, reach out to our team at Certified Credit. Along with the solutions listed above, we also offer:
- Affordable credit reports
- Automated undisclosed debt monitoring
- Fraud and risk mitigation
- Property and valuation support
- Flood zone determinations
- Underwriting compliance
- Settlement services
Ready to discover which solutions are right for your business? Schedule your credit consultation with our team today.
Sources:
CBS News. Federal Reserve lowers interest rates by 0.25 percentage points in second cut of 2024.
https://www.cbsnews.com/news/fed-rate-cut-today-november-meeting-federal-reserve-announcement/
APNews. Trump’s economic plans would worsen inflation, experts say.
Investopedia. What Donald Trump’s Presidential Election Win Means for Mortgage Rates.
Fannie Mae. Opportunities Exist to Offer Digital Verification Tools to More Homebuyers.
Forbes. The Personalized Customer Experience: Consumers Want You To Know Them.
Freddie Mac. 2024 Cost to Originate Study.
https://sf.freddiemac.com/docs/pdf/cost-to-originate-full-study-2024.pdf
Forbes. U.S. Consumer Banking Statistics 2024.
