The following is an excerpt from an article in Scotsman Guide written by Jornaya's Head of Consumer Finance Mike Eshelman. Read the entire article here.
Borrower retention strategies that worked a few years ago won’t cut it in today’s mortgage market. But it’s not the low interest rate environment, a lack of branding or an inferior digital mortgage application process that is driving consumers to other lenders. It’s data — or lack thereof.
The absence of data — or having stale, saturated or antiquated data — is leading mortgage lenders and originators to chase after consumers much too late into the sales funnel. Consequently, lenders have watched their retention rates plummet. For example, only 18% of the 2.8 million U.S. homeowners who refinanced in fourth-quarter 2020 were retained by the same servicer, the lowest quarterly share on record, according to Black Knight.
To combat these falling numbers, marketers are turning to technological advancements that are creating “better” data. Few mortgage companies have tapped into the potential of these unique new datasets, despite their ability to help lenders and originators make better marketing decisions. This untapped potential can truly revive their client-retention marketing strategies.
Stated another way, the goalposts for identifying which consumers are in the market for a home loan have moved up earlier in the homebuying journey. This allows lenders to capture the would-be borrower’s interest during the crucial first moments when the consumer begins their initial online research rather than waiting for the trigger of a Multiple Listing Service alert.