Independent Banker - November 2023 - 33

Next: A smörgåsbord of mortgage rates 
that there are two bills in Congress to
address it.
It's also worth noting that mortgage
providers try to prequalify prospective
buyers so they can make an offer on a
home as soon as they find a property
they like. In today's market, with a
shortage of homes for sale, any delay
in arranging financing risks losing
the home. By the time an MLS alert
is issued, a buyer is apt to have a
mortgage arranged. So, how can
community banks best mine data to
establish new customer relationships?
Where community banks can
acquire mortgage data
Community banks' first stop for
data should be their existing
customer databases. Using this data,
community banks can reach out to
customers when one of these events
occurs: when a customer's home
equity reaches a certain threshold and
makes it attractive for a home equity
line of credit (HELOC), and when an
existing home loan has a higher rate
than the rates currently available.
Good banks are getting better at
using internal data, says Michael
Peretz, managing principal at
Capco, where he leads the housing
finance practice. CEOs and boards
are getting very good at identifying
how to use the new data and new
analytics, he adds. Life events-such
" What you need before
you buy data is a data
strategy: 'What is
most important for us
to know, what do we
want to do with it and
how do we share it
with the people who
need to know in our
enterprise?' "
-MICHAEL PERETZ, CAPCO
Beyond internal customer data
Chris Flynn, head of product and
strategy for First American Data &
Analytics, a division of First American
Financial Corporation, says apart
from a community bank's own data,
public record data can provide entry
points for lenders.
as retirement or the birth of a child-
and preparation for them are prime
opportunities to contact customers.
" It used to be when I walked into a
board meeting, they would say they
know everything about their client
and act as though I was supposed to
take that as gospel, " he says. " Now it
is not just anecdotes. They say 'Our
data guys are telling us this, we are
skewing younger or older'; they know
more about their folks and they are
not simply relying on anecdotes. "
Community banks can become
expert users of their data by bringing
in a specialist to set it up and then
turning it over to the bank's executive
QUICK STAT
72%
of purchase mortgages were
approved by mortgage lenders
in 2022-the lowest in five years.
Data: FFEIC
Source: Homebuyer.com HMDA Mortgage Data Study
team to operate it.
" There are hundreds of good tools
out there, " Peretz says. " But what you
need before you buy data is a data
strategy: 'What is most important for
us to know, what do we want to do
with it and how do we share it with
the people who need to know in our
enterprise?' Typically, a small team of
informed executives who are familiar
with the direction the company wants
to go can put forth an execution plan
for that strategy. "
" Public record data can include
a wide variety of data points that
can provide powerful insight to help
lenders target their prospecting
efforts, " he says. " For example,
lenders can use land use codes to
target specific property types. "
He notes that lenders can also use
automated valuation models (AVMs),
available from data providers such as
First American Data & Analytics, to
determine property value estimates
and help identify properties that are
in the bank's target.
Community bank lenders can
also combine the property value
estimates from AVMs with other data
to calculate other data points, such as
loan-to-value or equity levels, which
can be helpful in finding borrowers
that are more likely to be in the
market for a mortgage.
" No matter the data source,
leveraging a comprehensive mix of
both property data and borrower data
provides opportunities to prospect
for new mortgage customers more
efficiently, " he adds.
But while data is important, so are
existing relationships. Community
banks are relationship lenders, and
as such, existing borrowers reach
out to them first for mortgage loan
or HELOCs. To retain customers
and cultivate those relationships,
community banks need to have a
seamless loan process that turns leads
into new loans.
Tom Groenfeldt is a writer in Wisconsin.
Rachel Hatcher is associate editor of
Independent Banker.
independentbanker.org // 33
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Independent Banker - November 2023

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