Louis Zitting: Are You Giving Your Old Contacts a Fresh Look?

Louis Zitting is founder and CEO of MonitorBase, Murray, Utah, a fintech company that monitors prescreened credit information and other real-time behavioral data to alert salespeople when someone is in the market to purchase or refinance a home. He began his career developing websites for mortgage companies before becoming a loan originator and branch manager for a large nationwide lender. His passion is helping clients find new ways to grow their business in a data-driven world while removing complexity from the process. He can be reached at lzitting@monitorbase.com.

Anyone who has ever been in sales is familiar with the famous quote from the author H. Jackson Brown Jr., “Nothing is more expensive than a missed opportunity.” The problem is that opportunities don’t always stand up and wave for attention—even when they are right under your nose.

In the mortgage world, generating business is either about looking for new leads or mining your database for new opportunities. Unfortunately, most mortgage sales professionals don’t put as much time and attention into the latter category, which is why customer retention has historically been such a struggle in our industry.

The reality is that most loan officers with a good-sized database have plenty of contacts who are ready to finance or refinance right now—they just don’t know who they are. But there are ways to identify them and turn a missed opportunity into a success story.

The Impact of Credit Migration

Most loan officers have obtained—and disregarded—tons of leads just because they didn’t meet certain lending criteria at some given time. Yet chances are good that the borrower who didn’t qualify six months ago will qualify today. The reason? Massive credit migration, which is occurring at previously unseen rates.

The proof lies within credit scores, which have soared to record highs during the pandemic. According to Experian, the average FICO score rose from 702 in January 2020 to 711 this past October. The likely reason? Many consumers used their federal stimulus checks to pay down debt. It’s also likely that many of these consumers previously applied for a mortgage or a refinance and were turned down but would qualify today.

Of course, the COVID-19 pandemic created enormous financial stress for millions of consumers who saw their jobs vanish or experienced some form of household income loss. Millions put their mortgage or rent payments on hold, and even if they were able to make those payments, they kicked other bills such as credit card payments down the road.

But as the economy improves, those who return to work and are able to resume payments will see their credit improve as well. These include people who decided not to pull the trigger on a new home or refinanced because they didn’t think they’d qualify—but they may qualify now or in the near future.

In fact, every month we see credit migration alerts that show more borrowers would qualify for financing. Their forbearance plan has ended, they’ve resumed payments, and their credit scores begin to rise. And even though it seems like everyone who could refinance already has, rates are still low enough to help these borrowers shave hundreds of dollars off their mortgage payments.

The problem? Most of these borrowers don’t even know that they meet the criteria for a mortgage. A borrower who was turned down six months ago may think they’re still out of the market. They may have an idea that their credit has improved, but they don’t know what it takes to qualify. But loan officers do, and they can let these consumers know—as long as they have the right technology in place.

How to Capture These Opportunities

Using soft-pull credit tools, today’s automated technologies continually monitor a loan officer’s contact database and instantly know whose credit is improving. They then immediately alert the loan officer to borrowers who are likely to be in the market for a new home or to refinance, even if they were previously turned down. This gives the loan officer the ability to reach out to their contacts before competing lenders do.

To be sure, most lenders, brokers and loan officers are already aware these technologies exist, but they’re not all the same. For example, many products do not use true, prescreened credit data, which can lead to a lot of wasted time and effort—things loan officers can’t afford to lose in today’s market.

Many products are also not capable of executing firm offers of credit when a contact meets lending criteria. This is really important, because many lenders are blasting out marketing pieces to large numbers of consumers with no clue about whether they can actually qualify. In most cases, these are just invitations to apply and they get turned down. And once a consumer is turned down by a lender, they’re unlikely to try that lender again. That’s not just a missed opportunity, but a spoiled one.

On the other hand, automated technologies that send valid credit offers to consumers at the right time can give a loan officer the opportunity to reach out and engage a potential borrower before anyone else does. These tools also help loan officers and lenders better monitor their marketing efforts, as most have no idea how much work is involved in getting deals. And they’re actually better for the consumer, too.

The bottom line in all of this is not to take credit migration lightly. While there were many financial casualties during the pandemic, there are also many consumers who are on the cusp of qualifying for financing that can transform their lives. You don’t have to be the world’s greatest detective to find them. You just need the right tools.

Never forget that a refinance that saves a borrower $500 a month in loan payments can solve all kinds of problems for them—and the loan officer who makes it happen will come out looking like the hero.

(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 msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)