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How can Lenders Prepare for High Volumes?

By December 17, 2020 January 8th, 2021
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After hitting record lows in 2020, mortgage rates are expected to fall even further in 2021. The 30-year mortgage rate is expected to average 3.075% in 2021, down from 3.125% in 2020, according to an average of forecasts from Fannie Mae (FNMA), Freddie Mac (FMCC), and the National Association of Realtors and the Mortgage Bankers Association.

While home prices are likely to go up in 2021, they will be moving at a slower pace than in 2020. Prices of existing homes are forecast to rise by 2.7% in 2021, compared with a 5.8% increase in 2020, according to an average of forecasts from Freddie Mac, NAR, and MBA.

As home prices will slow down, home sales are expected to pick up. As many as 6.323 million existing homes are expected to be sold in 2021, a 4.7% increase over 2020, according to an average of forecasts from Fannie, Freddie, NAR, and MBA.

This forecast means mortgage lenders whose business has been on a high through 2020 will continue to thrive even in 2021. How can lenders then prepare themselves to deal with the high volumes, rising customer expectations, stricter regulatory requirements, and operational challenges?

Here’s how they can do it.

Trusted Associations – Partners who can help manage

To manage high volumes, lenders can join hands with niche players or service partners who can help with the right kind of technology and infrastructure to improve operational efficiencies, save time, and reduce costs. By partnering with such companies, lenders can seek support when it comes to dealing with the high purchase and refinance volumes as well as in managing time-consuming tasks in the loan processing.

Another important advantage of partnering with competent service providers is that it helps lenders stand apart from the competition through superlative customer service. By associating with good service providers, lenders can offer customers a much-improved loan application process, which often is stressful for the borrowers.

Another aspect where lenders could seek help is mortgage processing which consists of complex tasks. Focusing on these tasks involves time and effort, which could otherwise be utilized to manage areas like compliance risk or even devising new product strategies. By joining hands with a service partner, such tasks can be completed through their highly skilled teams which means that the lender’s staff can focus upon the core objectives of the business. This will in turn lead to optimization of profitability and growth.

Leveraging Automation 

Traditionally, the mortgage market has been a little slower on FinTech adoption compared to other sectors. However, mortgage companies that have embraced modern technologies have managed to withstand turbulent times. They have been able to deliver stellar customer services and boost business recovery. In 2021 too, lenders will have to invest in robust tech infrastructure to deal with high volumes.

Automation plays a major role in offering a better level of digital service to customers. Technology is important even for simple tasks like customer queries which could be directed to sophisticated Artificial Intelligence (AI)- powered customer service bots, allowing customers to help themselves. Along with AI, utilizing other technologies like Machine Learning (ML), Robotic Process Automation (RPA), Artificial Reality (AR), Virtual Reality (VR), etc also means services can be developed to become more customer-centric delivering tailored products.

Moreover, the adoption of technology is beneficial because lenders can offer an advantage to customers in the form of greater choice, efficiency, and possibly lower cost. Technology can be leveraged in various areas like end-to-end digital origination and servicing, default prediction, optical character recognition (OCR), and self-service tools such as smart chatbots to perform customer requests.

Besides using technology for basic data analysis and to appraise the loan applicant, lenders can use advanced versions to find hidden financial relationships of borrowers, crunch large volumes of data, and most importantly, predict the behavior of the loan applicant. Moreover, fast, automated, high tech solutions can help replace repetitive, low-value tasks with touchless processes that deliver better results at superhuman speed.

ODC Relationships that can Scale Easily to Meet Requirements 

Another important step to prepare for 2021 is partnering with service providers that offer services like Offshore Delivery Center (ODC) — a preferred option for many lenders today. These ODCs are extended arms of the client’s operating environment that bring in accountability, transparency, and a governance model that gives them greater control over the processes followed.

ODC setups spread across various geographical locations have proved to be a stellar support system for lenders. Through a portfolio of specially designed industry-specific solutions, these domain-sensitized ODCs have hand-held clients to improve their business performance during tough times.

With high origination volumes expected to continue into 2021, mortgage lenders have to be prepared to handle them without sacrificing the customer experience. Companies need to look for servicing partners who can help improve workflows and streamline processes while decreasing overhead costs.

Companies like Visionet have bolstered their image as a bankable partner by offering their clients a unique combination of technology, digital operations, and proprietary mortgage technology products. If you wish to know more about Visionet’s products and services or wish to discuss business operations further, you can connect with us on https://bfsi.visionet.com/

Visionet Marketing Team

Visionet Marketing Team

Visionet is a leading digital technology solutions provider for the BFSI and Residential Mortgage industry. We are passionate to deliver exceptional business outcomes to our clients leveraging deep industry expertise and proprietary mortgage technology products. We post our views on mortgage technology and industry updates through this blog.