Expanded report now offers insight into the frequency of 11 of today’s top market opportunities for mortgage lenders
WASHINGTON, D.C. /CitizenWire/ — Sales Boomerang, the mortgage industry’s top-rated automated borrower intelligence and retention system, today released its Q3 2021 Mortgage Market Opportunities Report. Despite marketwide declines in loan volume, Sales Boomerang’s report identified several fertile opportunities for mortgage lenders, including a high frequency of borrowers who are well positioned to refinance for a better rate, remove FHA mortgage insurance or tap into home equity.
Methodology
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 that use its borrower intelligence and retention tools to monitor millions of customer and prospect records. Sales Boomerang then calculated 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 2021.
Key Findings*
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 2021 was as follows:
* Mortgage Inquiry Alert: 5.27% of monitored contacts (down 10.22% from Q2)
A customer or prospect has shopped with a competitor in the last 24 hours.
* EPO Alert: 2.23% of monitored contacts (down 8.23% 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: 1.32% of monitored contacts (down 40.00% from Q2)
A customer or prospect has improved their FICO score.
* New Listing Alert: 1.04% of monitored contacts (down 24.09% from Q2)
A customer or prospect has listed their home for sale.
* Equity Alert: 8.02% of monitored contacts (down 6.20% from Q2)
A customer or prospect’s home equity has increased.
* Rate Alert: 14.75% of monitored contacts (up 10.65% 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 or not 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 2021 was as follows:
* Cash-Out Alert: 4.31% of monitored contacts (up 291.82% from Q2)
A borrower is credit qualified and has built sufficient equity to tap into the cash in their home.
* Rate-and-Term Alert: 3.86% of monitored contacts (up 34.49% from Q2)
A borrower is credit qualified and can benefit from the current interest rates for a refinance.
* Debt Alert: 1.73% of monitored contacts (up 10.19% from Q2)
A borrower is credit qualified and can benefit from paying off other debts with the equity in their home.
* FHA MI Removal Alert: 7.27% of monitored contacts (up 366.03% from Q2)
An FHA borrower has exceeded 20% equity and can remove mortgage insurance (MI).
For a subset of lenders that maintain servicing portfolios, the frequency of risk-and-retention alerts was as follows:
* Risk & Retention Alert: 36.18% of monitored contacts (down 1.23% from Q2)
A customer is engaging in one or more of 15 credit activities that may put their serviced loan at risk
Analysis*
* Many FHA borrowers with mortgage insurance are unaware they have the option to remove their MI once they reach 20% equity. With a 366% quarter-over-quarter increase in FHA MI Removal alerts, lenders have the opportunity to deliver immediate monthly savings to borrowers.
* Although the frequency of Equity alerts fell slightly from Q2 to Q3, nearly one in 12 borrowers saw significant home equity growth over the last quarter. Moreover, the almost 300% quarter-over-quarter increase in Cash-Out alerts shows that borrowers have grown their credit scores alongside their equity, paving the way for more cash-out refinance and HELOC activity in the coming months. The strong performance of equity-based alerts is underscored by key observations from the latest CoreLogic Homeowner Equity Report, which found that the average homeowner gained $51,500 in equity during the past year while U.S. homeowners as a whole have seen their equity increase by a total of nearly $2.9 trillion since the second quarter of 2020.
* As long as interest rates remain low, refi opportunities remain on the table for many borrowers. This opportunity is apparent in the continued quarter-over-quarter growth of the Rate and Rate-and-Term alerts. However, with Mortgage Inquiry and EPO alerts both showing quarter-over-quarter decreases, lenders will need to be proactive in reaching out to potential refi customers, as many eligible customers do not appear to be shopping for rates on their own.
* With market experts long predicting a late 2021 home purchase boom, the 24% quarter-over-quarter decrease in New Listing alerts suggests lenders may need to revise their year-end revenue forecasts.
* Risk & Retention alerts held nearly steady from the second quarter. With more than one in three borrowers exhibiting risky credit behaviors, mortgage servicers should keep a close eye on their portfolios for default risk.
“As industry experts have predicted, we are starting to see the refinance market slow – and the purchase market has not yet picked up the slack,” said Sales Boomerang CEO Alex Kutsishin. “Still, the big-picture view says we are still in the midst of a housing boom. Ample purchase and refinance opportunities remain, and our data intelligence points to myriad ways lenders can improve borrowers’ financial position with the right loan product.”
*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.
About Sales Boomerang:
Sales Boomerang transformed the relationship between mortgage lenders and borrowers with the introduction of the first automated borrower intelligence system in 2017. The company’s intelligent alerts notify lenders as soon as a past customer or prospect is ready and credit-qualified for a loan. As the mortgage industry’s #1 borrower retention tool, Sales Boomerang is trusted by more than 150 lenders – including brokers, independent mortgage companies, credit unions and banks – to help build lasting borrower relationships that maximize lifetime customer value. To date, Sales Boomerang alerts have enabled lenders to close more than $30 billion in additional loan volume that would have otherwise been overlooked and achieve customer retention rates that outperform industry norms by an average of 3-5X. To learn more about Sales Boomerang and its No Borrower Left Behind(tm) ethos, visit https://www.salesboomerang.com.
@SalesBoomerang
Learn More: https://www.salesboomerang.com/
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