We can’t predict where rates will go, so serve all segments of the market

Final Part: Why didn't anyone predict that rates would fall in January? All the predictions had me geared up for purchase business and I was taken by surprise and missed many opportunities. Why can't we get better data?

--Written by several loan officers.

We have been speaking about how to diversify your business so that you are prepared for the many changes which continuously occur within this industry, the real estate industry and the markets. We left off last week with a comment regarding the provision of a formal pre-approval service. This is really an important point which I wanted to relate back to the original question. When rates go down quickly, refinances rise quickly. And our purchase business suffers. Many operations departments get backed up and the inclination is to stop sending "pre-approvals" through the system. This is a big mistake.

When the refinance business is over, loan officers then start scrambling for purchase business. Those who continue to prioritize service on purchasers will have less of a problem with the transition. I can think of no more important service than providing pre-approvals which make the entire process smoother for everyone, especially in today's era of TRID. In addition to giving more negotiating power to the buyers because a fully underwritten pre-approval is stronger than a pre-qualification/pre-approval opinion by a loan officer, it keeps the clients engaged in the home buying process. In short, we can't even predict where rates will go, and that is why your business must be built to serve all segments of the market.

--Dave Hershman

Dave Hershman has been the leading author and a top speaker for the industry for decades with six books authored and hundreds of articles published. His website is www.originationpro.com. If you have a reaction to this commentary or another question you would like answered in this column? Email Dave directly at [email protected].