Latest data underscores opportunity to revisit prospects previously turned down for credit-related reasons
OWINGS MILLS, Md., and IRVINE, Calif., Oct. 20, 2022 — Sales Boomerang, the mortgage industry’s top-rated automated borrower intelligence and retention system, and Mortgage Coach, a platform empowering mortgage lenders to educate borrowers with interactive home loan presentations, today announced the release of Sales Boomerang’s latest Mortgage Market Opportunities Report. Despite significant year-over-year declines in mortgage volume, the Q3 2022 report showed an increase in Credit Improvement Alerts, signaling the opportunity for lenders to offer timely advice and tailored financial solutions to prospects with newly improved credit scores.
The Mortgage Market Opportunities Report draws on Sales Boomerang system data to identify market opportunities of relevance to today’s borrowers and lenders. To generate the report, Sales Boomerang reviewed data from more than 150 residential mortgage lenders, a subset of its clients, that use its borrower intelligence and retention tools to monitor millions of customer and prospect records. Sales Boomerang then calculated and compared the aggregate frequency with which those contact records triggered loan-opportunity, prescriptive-scenario and risk-and-retention alerts during the second and third quarters of 2022.
Sales Boomerang’s loan-opportunity alerts identify the contacts inside a lender’s database who are actively shopping for a mortgage loan or who may be able to benefit from a new mortgage loan. Across the sample group, the frequency of each alert type in Q3 2022 was as follows:
- Mortgage Inquiry Alert: 2.84% of monitored contacts (down 12.21% from Q2)
A customer or prospect has shopped with a competitor in the last 24 hours.
- EPO Alert: 2.05% of monitored contacts (down 11.38% from Q2)
A customer or prospect whose loan closed ≤ 6 months ago has shopped with a competitor in the last 24 hours.
- Credit Improvement Alert: 5.47% of monitored contacts (up 33.41% from Q2)
A customer or prospect has improved their FICO score.
- New Listing Alert: 1.12% of monitored contacts (down 22.04% from Q2)
A customer or prospect has listed their home for sale.
- Equity Alert: 4.68% of monitored contacts (down 40.98% from Q2)
A customer or prospect’s home equity has increased.
- Rate Alert: 0.49% of monitored contacts (down 80.94% from Q2)
The interest rate of a customer or prospect’s existing mortgage is significantly higher than current prevailing rates.
Sales Boomerang’s prescriptive-scenario alerts analyze not only whether a consumer could benefit from a given loan type, but also whether the consumer is credit-qualified to apply for financing. This additional layer of intelligence makes prescriptive-scenario alerts among the highest-converting available to mortgage lenders today. The frequency of each alert during Q3 2022 was as follows:
- Cash-Out Alert: 2.60% of monitored contacts (down 62.18% from Q2)
A borrower is credit qualified and has built sufficient equity to tap into the cash in their home.
- Rate-and-Term Alert: 1.23% of monitored contacts (down 51.37% from Q2)
A borrower is credit qualified and can benefit from the current interest rates for a refinance.
- FHA MI Removal Alert: 10.39% of monitored contacts (up 31.07% from Q2)
For a subset of lenders that maintain servicing portfolios, the frequency of risk-and-retention alerts was as follows:
- Risk & Retention Alert: 30.28% of monitored contacts (up 40.45% from Q2)
A customer is engaging in one or more of 15 credit activities that may put their serviced loan at risk
- Mortgage Inquiry, EPO and New Listing alerts all decreased in Q3 as consumers stopped actively looking for new mortgage products. As interest rates rise and homebuyer sentiment approaches an all-time low, lenders will need to create their own opportunities for outreach rather than waiting for borrowers to reach out themselves. For example, lenders may find success capturing purchase opportunities by leveraging a seller buy-down strategy to combat high interest rates that might prevent buyers from committing to a purchase.
- Credit Improvement alerts increased for the third consecutive quarter. As lenders reconnect with turndowns whose credit scores have improved, they’ll need to get creative in serving consumers’ home finance needs. Recent data backs up the claim that borrowers can benefit from an adjustable-rate mortgage (ARM), so lenders should be prepared to educate borrowers on the pros and cons of these products.
- Risk & Retention alerts were up more than 40% in Q3 as consumers took on unprecedented personal debt, spending in other areas as the housing market continues to cool. According to the Federal Reserve, revolving credit card debt increased by 18.1% in August and total consumer debt surged to a record $4.68 trillion. Lenders can offer relief while protecting their servicing portfolios by presenting refinance options designed to help borrowers pay off high-interest debts and improve monthly cash flow.
”To find success in today’s market, lenders not only must be proactive in their borrower outreach, they also must level up the creativity of the financial strategies they bring to the table. It’s a tall order, but not an impossible one — and we’re here to help,” said Sales Boomerang and Mortgage Coach Chief Visionary Officer Alex Kutsishin. “With Sales Boomerang’s borrower intelligence, lenders can spot opportunities a mile away. And by leveraging the power of the Mortgage Coach Total Cost Analysis, lenders can bring even the most nuanced financial scenarios to life in a way that inspires borrower understanding and trust.”
*Key findings and analysis provided for informational purposes only. The data represented in the Mortgage Market Opportunities report is historical. Past performance is not a reliable indicator of future results. Sales Boomerang accepts no responsibility or liability for readers’ use of the key findings or analysis included in this report.