NMP - December 2016 - 74


Strategies That Get You to the Goal Post
By Alice Alvey

Growing in a down market
o lenders really
factor in the
economic
predictions for
2017 and 2018
when determining
their growth strategies for 2017
and 2018? Economists have
adjusted their volume predictions
for 2017 and 2018 several times
since mid-year to reflect lower
refinance volume. They made
final adjustments by adding that
purchase transactions will be up.
The Mortgage Bankers
Association (MBA) is forecasting
1.63 trillion in mortgage
originations for 2017 with
approximately 68 percent of this
volume from purchase

D

transactions. The MBA is also
predicting $145 billion of
refinance production in Q1 2017
on the heels of $263 billion in Q4
of 2016.
Of course, all predictions are
based on many assumptions
including that interest rate
increases won't push us over the
five percent mark and, as Chair
Janet Yellen and the Fed have
indicated, that "rate increases
through 2017 and 2018 will likely
be gradual ... The Fed] is going
to be cautious going forward."
Granted, by the time this article
is published anything may have
caused even these predictions to
change. But two factors are very
clear-the opportunities will shift
from the 2015-2016 plans lenders

DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

74

THE NATTION'S LARGEST
REG
GIONAL MORTGAGE
CON
NFERENCE IS BACK!

13

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ANUARY
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had in place. Lenders will need
growth strategies targeting
purchase buyers in order to
compete.
Top growth strategy areas
So what are the top three areas
of focus mentioned in almost
every 2017 strategic plan across
the mortgage industry? If you
guessed that implementing new
technology is on everyone's list,
then you guessed the easy one.
It's like the game Family Feud-
the top answer is usually the
easiest one to shout at the
buzzer. Did you guess customer
service initiatives as also being in
the top? The third one is the wild
card. Believe it or not, many
lenders are looking to expand
their product offerings. This
includes energizing FHA/VA/RD
programs, adding portfolio QM,
and reaching more nontraditional
and first time buyers. There is a
case to be made that adding
efficiency to reduce costs is also
at the top and it tied for third
place. These top points represent
investment strategies of varying
degrees and tactics. But that all
starts with the condition of the
company's balance sheet.
It is all about money
"Developing sound growth
strategies for 2017 is a balancing
act. Lenders and vendors in the
industry are forced to balance the
customer, financial viability, and
compliance," said Rajan Nair,
CEO of Financial Services at
Indecomm Global Services. Nair
describes this as a three-legged
stool and each one has
contradictions with the others.
Customers have come to
expect their experience with a
lender to have the same userfriendly interface as buying from
Amazon Prime-seamless, easy
to understand, fully disclosed
and transparent from the time the
order is placed until the package
is delivered. Growth strategies in
2017 for lenders are very focused
on improving the customer
experience and competing with
the expectations set by retail

shopping. This puts a lot of
pressure on making the right
choices for website design and
software partner coordination
with sales and operations
systems.
Growth strategies for 2017
include leveraging the many
cloud-based platforms that
support CRM, tax return
calculations, agent and lender
coordination and accountability,
as well as verification ordering.
These platforms can jump start
the application process, saving
valuable time. In planning for a
growth strategy that seeks to
escalate the customer
experience, it is critical to
calculate the value to the bottom
line. In each case there are clear
ways to measure the ROI. For
example, the return-oninvestment (ROI) in a Software as
a Service (SaaS) model platform
is a variable cost. By
implementing a platform that will
read the tax returns, calculate
income and prepare the
necessary underwriting
conditions, the loan level cost is
easy to compare with the time
saved in underwriting a selfemployed borrower's loan.
RegTech Strategies
RegTech companies have
evolved in the mortgage space
and their numbers are growing.
RegTech is a new concept
derived from the definition of
FinTech, primarily signifying the
technology applied to resolve
issues regarding regulation within
the financial industry. Just like
the customer service options,
RegTech firms often go after a
unique problem in regulatory
compliance and offer a specific
solution that is not readily
available in the Loan Origination
System (LOS) or servicing
system. When establishing tactics
to manage regulatory compliance,
lenders are placing significant
weight on the vendor and vendor
management risks. The benefits
the vendor brings to the table are
weighed just as heavily as the
value of the software platform
itself. Business partnerships are
going deep to manage regulatory
risks. Lenders are seeking
partners that can provide support
in everything from software
services to business process


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Table of Contents for the Digital Edition of NMP - December 2016

Contents
NMP - December 2016 - Cover1
NMP - December 2016 - Cover2
NMP - December 2016 - 1
NMP - December 2016 - Contents
NMP - December 2016 - 3
NMP - December 2016 - 4
NMP - December 2016 - 5
NMP - December 2016 - 6
NMP - December 2016 - 7
NMP - December 2016 - 8
NMP - December 2016 - 9
NMP - December 2016 - 10
NMP - December 2016 - 11
NMP - December 2016 - 12
NMP - December 2016 - 13
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NMP - December 2016 - 111
NMP - December 2016 - 112
NMP - December 2016 - Cover3
NMP - December 2016 - Cover4
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