Joe Zeibert: Leveraging Right Data Analytics Can Make All the Difference
Joe Zeibert is Managing Director of Global Lending Solutions with Nomis Solutions, Brisbane, Calif. He works closely with clients around the world to identify new mortgage and other consumer lending opportunities. He brings deep expertise in innovation of pricing models for lending products. He joined Nomis from Ally Financial Inc. where, as senior director of product, pricing, credit and analytics, he helped lead the build of Ally’s mortgage business from the ground up. Before that, as senior vice-president of consumer products and pricing at Bank of America, he led home-equity pricing. For more information, visit NomisSolutions.com.
We live in world of data and the mortgage industry is no exception. In 2020 alone, it is estimated that 1.7 MB of data was created every second by each person. While this constant stream of data can provide mortgage professionals with a lot of useful information, translating, analyzing, and converting it into actual actionable intelligence can prove both time consuming and often easier said than done. However, leveraging the right data analytics can provide today’s mortgage companies with many competitive advantages and allow them to better support their LOs – letting them focus on what they do best and maximizing both customer satisfaction and revenue.
What borrowers know vs. what they need to know
Just as today’s lenders and LOs have access to more data than ever before, so too do their borrowers. Our modern, connected environment ensures homebuyers can shop and review loan rates, home values, and other mortgage details, all from their phones. And with the pandemic keeping more people at home, many are taking the opportunity to dive in on their research. However, while borrowers are doing their fair share of due diligence, they may not necessarily be looking at truly comparable and accurate data related to the markets they are researching.
It is no secret lenders and LOs want to be a seen as a trusted partner and one great way they can do this is by bringing more to the table than basic information that borrowers can easily find themselves through a quick Google search. However, just having better data is still not enough. Lenders and LOs should have both a bigger view as well as the ability to make sense of the data. They should be able to see everything from local rates by MSA and/or zip code and offer details (including points, fees APR and monthly payments), to full market activity and local competitor offerings, as well as how these data points interact and impact one another. To firmly establish that borrower trust, LOs must be seen as true experts with the knowledge and ability to analyze all details and offer solid market evaluations at all levels, effectively communicating their insights to borrowers. By providing LOs with access to real-time price sensitivity analysis, they can have the granular data at their fingertips to do just that, increasing trust with borrowers and revenue for their companies.
Making the most of the data
While access to better data can give individual LOs the opportunity to build deeper borrower relationships, it can also impact and benefit an organization’s larger operations, especially when it to comes to pricing. Often borrowers are the most sensitive to price at the point-of-sale when they first connect with a lender. By looking at these interactions at a larger, macro scale, mortgage and lending executive leaders can see what all their borrowers are seeing, allowing them to more strategically set prices to help maximize profitability. With pricing data quickly and continuously shifting due to market fluctuations, lenders could choose to track those trends as closely and as often as they want, adjusting their pricing as needed within their own PPE or LOS systems. This would allow them to be able to make better, more accurate offers, faster.
A better understanding of the competition is a competitive advantage
Often, it can be difficult to make a truly educated review or comparison when looking at the competitive landscape. Accurately benchmarking how rates and offers stack up can prove challenging when the comparisons may not be apples-to-apples (for example a local mortgage lender, vs. a privately held, regional independent mortgage bank, vs. a large international commercial bank). A broader, comprehensive data analysis approach allows lenders to not only see a bigger, more complete view of particular markets, but it can also let them compare at more a granular level if needed (e.g.., lender type or size).
However, while it can be tempting to focus on comparing against similar lenders or companies, it is often more valuable to look at the specific markets and what all competitors, regardless of size or type, may doing to impact it. If a large national bank is making in-roads there or a local community bank or credit union has recently adjusted its pricing, it could have greater implications. Having a better feel and understanding of these market dynamics can allow lenders to see the bigger picture. A more complete view of the data means lenders can better adjust their own pricing to match changes to markets while ensuring its in-line with what their competitors (true or otherwise) may be offering. As an aside, this access can allow a company’s LOs to quickly gain the reputation of being expert sources for the latest mortgage data, giving them a further competitive advantage and helping to ensure clients call them first the next time they need a loan.
With 2021 fast approaching, many lenders are now considering their strategies and goals for the new year. While we can forecast the trends and what might be up or down, one prediction seems a safe bet and that is the amount of data available for lenders and LOs will continue to grow. However, having the data is only one part of the equation. Without the ability to process, analyze and act on it properly, this information may be more hindrance than help. Bottom line – whether it is exploring new markets, adjusting pricing and resources, or keeping an eye on the competition, lenders must ensure they are basing those decisions on more than just “gut feelings.” A better approach to data can be the key to growing volume and ensuring success.
(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.)