Bruno Pasceri: The Transformation Ahead
MBA NewsLink interviewed Bruno Pasceri, President of Incenter LLC and a mortgage industry leader for more than 30 years, about the mortgage banking market and how to navigate future changes.
Incenter LLC is headquartered in Fort Washington, Pa. More than 1,600 Incenter professionals provide processing and fulfillment services to the mortgage and specialty lending industries including title and settlement, appraisal management, title underwriting, MSR hedging and trading and student loan origination support.
MBA NEWSLINK: How do you see the mortgage banking market evolving in 2021?
BRUNO PASCERI: The biggest milestone will be a transition to a purchase market, as the refinancing wave breaks and purchase originations surge ahead.
At the same time, new cracks will appear below the origination surface. Traditionally, the trajectory of our industry has been W-shaped and I see the beginnings of a descent.
We will have to face some new headwinds, as shrinking inventories, elevated pricing and economic uncertainty push many prospective purchasers to the side. Some borrowers with student debt, for example, will be eliminated, and all of us will be competing harder for the homebuyers who remain.
Despite these challenges, new opportunities are on the horizon as the homeowners market opens up. Buyers of older homes needing renovation, longtime owners making repairs and Baby Boomers wanting to age in place will all be attractive prospects.
We have a great deal of work and re-maneuvering to do to navigate the transformation ahead.
NEWSLINK: What actions should mortgage bankers be taking?
PASCERI: There is no one silver bullet; we’ll need to harness a combination of strategies.
First, product diversification to tap into the homeowners market will be critical. Renovation mortgages, home equity loans and reverse mortgages will all need to be part of our repertoire. The market is filled with many excellent products; reinventing them will only cause unnecessary delays in reaching borrowers.
Second, we will need to rely more on back-end technologies to streamline processes, cut costs and differentiate ourselves through better service.
It’s going to be challenging enough to reconfigure our workflow. At the same time, a potential wave of defaults could drown us if we don’t find a technological life raft.
Solutions to shorten the default lifecycle, eliminate redundancies and help get nonperforming assets re-performing as quickly as possible will be important to investigate.
Being able to optimize and scale more profitable activities–such as mortgage originations–will also rest on smarter use of these technologies. For example, AI-based decision engines that quickly clear titles to close have been a boon during the refinancing boom, shortening one of the most cumbersome processes in the lending cycle. Similar data-driven technologies will help us accelerate mortgage lending and speed credentialing at the secondary market level, too.
Most urgently, we will need to re-educate our salesforce on how to attract more purchase business. The values that led to our success generations ago–a focus on relationships above all else–should become our North Star once again.
NEWSLINK: Any additional thoughts about the mortgage business today?
PASCERI: We should be going back to the basics of what our business is all about–people forming friendships with other people. Being able to bond with new borrowers will be the first step in developing the lifetime customers who are foundational to our growth.
To do this, we will need to shed our stereotypes of what today’s borrowers want. Yes, we will be interacting with new generations of digital natives who communicate by text and may seem averse to conversation. But beneath that veneer, they’ll be looking to us to hold their hands. After all, they will be making the biggest purchases of their lives, and the thought of it may put them into a cold sweat. We can be their family, trusted counsel and the people they’ll always love for handing them the keys to their future.
The “stickiness” of this process won’t start at the computer. If home is where the heart is, it will start in what many have said is the heart of the home–the kitchen. Every time a closing approaches, lenders will want to sit down with borrowers there–in person or virtually. I guarantee that the extra level of attention will make these borrowers feel that they matter. Moreover, attending every single closing will be imperative as the final chance to make a lasting, positive impression. It will glue homebuyers to their lenders for life–whether they need personal loans or another mortgage later on.
As we migrate to a purchase market, we’ll also want to remember who our true customers are–the realtors, attorneys and others who quarterback borrowers’ homebuying teams. The way we will add value and become part of their top lineup is to take exquisite care of every referral.
Cultivating relationship-oriented salespeople may require mortgage bankers to retool their corporate culture–putting their primary focus on their people. I’ve always felt that if we treat our colleagues like family, the profits will follow. Caring leads to a committed staff whose clients feel the love, too. As we move into 2021, a relationship-based approach will propel us toward success, enabling us to confront the headwinds and ride the tailwinds ahead.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at firstname.lastname@example.org or Michael Tucker, editorial manager, at email@example.com.)