Three strategies to maximize customer retention
The unprecedented, pandemic-related events of 2020 have culminated in a rare and extraordinary lending convergence that’s carried over into 2021: motivated buyers are tapping historically low mortgage rates to gain more purchasing power while sellers respond by increasing home prices.
The lending market has been realizing the results. Black Knight’s recent Mortgage Monitor Report found a whopping $4.3 trillion in mortgages were originated in 2020—$2.8 trillion in refinances alone—with the last quarter of 2020 seeing a record-breaking $869 billion in refinance lending. In addition, the Mortgage Bankers Association (MBA) forecasted 2020 to be the mortgage industry’s strongest year in originations since 2003, with the average purchase loan amount hitting the highest value recorded since the inception of MBA’s survey in 1990.
Despite Q1 2021’s rising interest rates, Black Knight expects the quarter’s refinance lending volumes to remain near Q4 2020’s meteoric high. But it’s not going to last forever—in fact, the lending market already exhibits symptoms of an approaching end. According to Black Knight, since March 4—when news hit of interest rates breaking 3%—the number of remaining, high-quality refinance candidates shrank by 30% in only three weeks, hitting its lowest volume since May 2020.
“When two waves meet, and their crests and troughs align, the resulting energy creates a much bigger wave that’s extremely powerful—something surfers call a ‘double-up’ wave,” said Joe Welu, founder and CEO for Total Expert. “Right now, a tremendous but fleeting double-up wave in the lending market is gifting lenders with a business boom. That’s why we’re calling 2021 ‘The Year of the Loan Officer.’ But this double-up wave is doing something else, too: it’s putting an extremely strong squeeze on a loan officer’s valuable but limited time and attention.”
Make these three loan ops improvements now to capitalize on this year’s rare confluence of high equity and low refinance rates.