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Manufacturing a Mortgage-Thinking Like a Consumer

Now that everyone has had a chance to review the first article in this series, it is time to make things happen!  My goal with this article is to continue to work on your way of thinking, alter what you think you knew about manufacturing a loan and then begin the practical suggestions of re-engineering our entire process.

To do this successfully you will need to take off your mortgage banker hat and put on two other hats; the consumer and the regulator.  While one may think that the consumer and regulator should be on the same side, it is evident that some regulatory compliance wasn’t thought through to the degree that it evaluated the impact on the consumer.  Many of the regulations will assist the consumer and unfortunately some will not.  Today I will address the consumer.

The Consumer:

Before you guess what a consumer will seek from you, you need to decide what consumers you are seeking.  Answering “anyone that needs mortgage financing” is not narrow enough as different consumer sectors have different needs.

For instance, if you are after the first time home-buyer they will require you to be technology savvy and abundant in first time homebuyer financing solutions.  If you don’t want to invest heavily in technology, then they are not your market, because they grew up with it and can’t imagine working with a company who is behind the times.

Many of you believe that you have already gone through this process.  I would submit that the industry has changed so drastically that this evaluation must occur to increase efficiency, profitability and demonstrate structure to the examiners.  This type of analysis will be paramount to the success you have with the CFPB.

So, the first step is to define who your primary client(s) will be.  For Fair Lending purposes you should seek several lines of business to properly accommodate your assessment area(s).

The next step is to talk to people who qualify for those lines of business.  Ask them what they would expect of a mortgage company.  Do not ask other mortgage bankers or real estate agents!  You want a fresh perspective and may be surprised at what consumers tell you.  This technique is similar to a “focus group”.  Essentially we are asking people what their expectations are and then designing a process to meet the “core” of those expectations.  The “core” means the expectations that seem universal to the group.  You don’t have to establish a formal process for your intel; although you certainly can.  Your executive team probably has enough of a network to cover consumers who would fit within the lines of business you choose to pursue.

Once you have determined what markets may make sense, it is time to discuss with your executive team and “define your lines” of business.  Are you willing to do what it takes to mesmerize that market?  To help you get started, consider the following buckets:

  1. Technology Requirements (online loan application, mobile access, online updates, pricing)
  2. Product Diversification:  What types of products will these markets require?  Do you have access to those products?  Can you get access?  Is it profitable?  What risk level is involved that may affect your performance with the market?
  3. Training:  How will you ensure that your staff has the formal knowledge to handle the transaction the way it needs to be handled?  Having teams that are highly skilled in certain market-place sectors may be a consideration for optimum customer satisfaction and referrals.
  4. What is you Plan?  How will you roll it out?  How will you evaluate it and when?  What will you do to correct the “blips” in the system?
  5. Marketing Tactics:  What does that exact process look like and how will you monitor it.
  6. Regulatory Concerns:  Not everything that a consumer wants will pass the regulatory test.

No doubt this is more work just when you do not need it, yet it is work that will provide you with the results you want in your bottom line!

Tammy Butler, Master CMB

Author Tammy Butler, Master CMB

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