Executive talks succeeding in current market
It’s no secret that purchase activity in the US mortgage market has plunged amid rising interest rates during the past two years – but brokers and loan originators are being advised to keep their ears close to the ground, and maintain constant contact with clients, as refinancing potential grows.
Anthony Casa (pictured), chief executive officer of UMortgage, told Mortgage Professional America that a “surge” in refinancing was already underway, with many LOs calling their past customers following a recent drop in mortgage rates only to learn that those clients have already refinanced.
Mortgage professionals should heed the approach of lending giants, he said, when it comes to presenting options to borrowers. “The servicers, the Mr. Coopers, the Penny Macs, the Freedoms, the Rockets – they don’t wait for rates to drop to call your past client,” he said.
“They’re standing in front of them every day whether there’s a refi opportunity or not, they’re contacting them about a HELOC, they’re contacting them about a cashout refi, and when rates drop, they’re also contacting about this.”
Those are textbook examples of effective retention, he said. “For the loan originator community, one of the biggest things that they all need to wake up to is that if you’re going to build a sustainable business where you retain your past clients, you’ve got to stay in touch with them all the time – not just when you’re ready to transact with them.”
Casa said UMortgage had taken an approach in recent years aimed at building to grow in all scenarios, expanding its business irrespective of whether the overall market is flourishing or struggling.
That’s been driven by a methodical focus on the sales side, he said – “making sure our sales team is proactively acquiring new customers consistently and we’re not relying on the market.
“If rates come down, great – we refinance some of our past clients. But that doesn’t change the fact that we’re still proactively building relationships in our community, in all markets, all the time, consistently to keep growing.”
It’s a strategy that he said will allow brokers and other mortgage professionals to weather a lethargic market and keep expanding even in tougher times. “That sales-process focused mindset that we’ve adopted, and that is very deep in our culture, has played a role in the fact that you don’t have to shrink when the market shrinks,” he said. “You can grow in a shrinking market if you have really good, defined processes with high accountability.”
Gearing up for success – even in a cooler market
A weakening national economic outlook has helped push mortgage rates on a downward trajectory in recent weeks, while the Federal Reserve looks almost certain to cut interest rates for the first time in over four years in its September deliberations.
Last week, Fed chair Jerome Powell appeared to give the green light for a rate cut, indicating in a speech at the central bank’s annual retreat in Jackson Hole, Wyoming that “the time has come” for rates to begin moving lower.
US mortgage rates are falling, and Kurt Brandly of Greenside Capital sees a surge in activity! With the Fed expected to cut rates, now might be the time to act on refinancing or buying. https://t.co/Tg7lw8vzgX
— Mortgage Professional America Magazine (@MPAMagazineUS) August 26, 2024
That’s spurred optimism for brighter times ahead in the US mortgage market – but the value of priming for busier times even when the market is colder, Casa said, has been a constant focus for UMortgage this year.
Gearing up for an uptick in activity has been top of mind throughout 2024. “The market’s going to improve. Rates are going to decline,” he said. “And we’re focused on exponential growth. So we’re recruiting very proactively. We’d rather be early than late, and we’re hiring in all roles.
“I think for the general market – whether you’re planning to grow by three times or just by 25% - everybody’s going to grow in a growing market. So just being very proactive with your approach to hiring and developing your team is critical right now in the early stages.”
Technology for mortgage firms
For smaller players in the mortgage market, Casa also emphasized the importance of making the right investments in technology and training in order not to be left behind by the industry’s giants, particularly with merger and acquisition activity having shot through the roof during the prolonged market downturn since 2022.
He said the industry is currently marked by “the single biggest gap I’ve ever seen” between the big players and the rest of the market on the retail, wholesale, and servicing sides. “The difference in size between them and their smaller competitors is so massive and they have the advantage of economies of scale,” he said.
“But not only that – when you’re that big, you just are really good at what you do. So I think there’s a really important theme out there which is that the small need to invest in technology, they need to invest in training, they need to invest in their platforms if they want to close this gap.”
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