Broker marketing mortgage strategy

Sales Automation Solutions Streamline Operations

The prevailing wisdom is that post-election rates will trend higher. Mortgage bankers are looking at the potential downside impact this will have on their margins and market share. Executing proactive strategies that mitigate against major declines in margin or share will make or break many mortgage banking careers.

As Rates Rise Loan Volume Falls

Since there is less business to go around, some mortgage making competitors cut rates and fees to the bone-thus creating a margin squeeze. In addition, the loan mix flips from predominantly refinance to purchase. In fact, the Refinance Index has fallen over 86 percent since last year's record, according to MBA's weekly applications survey. This forces mortgage bankers and brokers who were cashing in on the refinance boom to scramble...resetting and retooling their sales strategies, tactics and infrastructure to catch up to wily competitors who remained focused on purchase throughout the boom. For those trying to catch up, margins are squeezed not only to "buy" the business but also to sell the business (increasing expense to fund the sales retooling effort).

Guillermo Kopp, senior analyst with Tower Group agrees, saying "Financial Service Institutions (FSIs) - particularly lending institutions - need to rethink the way they do business, prioritizing ROI-boosting activities that will ultimately enhance market share, customer retention, and cross-selling opportunities. On top of that, there is need for lenders to prepare for the inevitable changing climate in the mortgage industry, and it's becoming clear that sales automation solutions offer the best way to seamlessly integrate and automate business processes."

In light of this, we have interviewed four leading mortgage banking institutions' to find out what they are doing about sales automation strategies to help their sales teams win the hand-to-hand combat brought on by rising rates.

First Franklin Financial Corporation

First Franklin Financial Corporation is a mortgage banking firm with an enviable track record in sub-prime, experiencing record Q2 04 growth with $8.0 billion in loans.

According to Steve Skolnik, executive VP of production at First Franklin Financial Corporation "FFFC's strategy for dealing with rising rate market conditions focused most on the drivers for our business. And the driver on the top of our list was how to help our seasoned sales team increase sales in the face of fierce competition. A key component in our strategy to grow our revenues was deploying a Wholesale Mortgage Broker Relationship System (BRS), from GuideMark," (Nashua, NH).

The solution has streamlined the process of obtaining loan information our AEs to get the results of a loan decision quickly and on the fly," says. Skolnik. He added, "in the past, when a broker wanted to know the status of their business with us, our account executives would have to collect information from multiple systems to create a composite view for their broker, which was time consuming. Now, as our sales team is out in the field, BRS gives them immediate access to the broker's information as a composite view right on their laptop." The system enables them to analyze the broker's business effectiveness over a period of time and review broker successes and areas for improvement by broad categories like product or even get to the detailed level of a specific loan.

Skolnik went on to say "beyond the ability to access and analyze loan information, the system is also helping us to transform the AEs relationship with our brokers by giving them the ability to cross reference demographic data with our customers. We use this demographic business intelligence to tailor e-mails and marketing campaigns to provide brokers with targeted, innovative products that will help them grow their business. This mind set is delivering bottom line benefits to our brokers, our enterprise and our AEs. Let's face it, in tough market conditions, mortgage bankers are under increasing pressure to be aware of, and react to, changing business conditions by examining all sources of information that can help improve bottom-line performance. At First Franklin, we leave no stone up-turned."

Flagstar Bank

Flagstar Bank, one of the nation's leading mortgage bankers with 2003 broker wholesale volume of $32 billion, realized early on the importance of supporting its AEs and brokers. About five years ago, Flagstar chose to develop an in-house, front-end system called Mortrac that enabled its 2,500 approved brokers to easily register and lock a loan. Today, this online conduit channel allows loan data to flow bi-directionally to and from its sales team and customers.

According to Jody Paul, assistant VP of Flagstar National Sales, "We look at Mortrac 2.0 system as the sales automation tool that propagates best practice processes because we custom tailored it to fit our specific needs - which had to be easy to use, save time, provide valuable information, and improve both overall productivity and cost efficiency on an ongoing basis."

The Mortrac system works by assigning the broker a loan number and registering all the data and correspondences associated with the customer inquiry. Flagstar's 143 AEs use the sales automation tool to communicate with the brokers, view eustomer correspondences, loan information, expiring locks and reports easily and effectively as well as a window into the sales pipeline.

"We understood early on that our AEs need to access important data in order to identify who their best customers are, track critical sales ratios and communicate quickly responses to critical customer inquiries in a cost effective manner," said Paul. "Our Mortrac 2.0 provides the right mix of knowledge and analytics to our sales force and subsequently to their brokers as to what their business is providing in terms of what their closing ratios are and in understanding the value of the products they are offering."

InterFirst Wholesale Mortgage Lending

InterFirst Wholesale Mortgage Lending, a division of ABN AMRO Mortgage Group, Inc., uses a consumer-centric sales strategy that consists of a number of components. These began with "SatisfactionFirst", a customer-based research initiative that was launched to determine mortgage broker satisfaction with InterFirst's products, pricing and business practices. SatisfactionFirst gathered feedback on the specific needs of the broker community, enabling InterFirst to create a response to those needs.

"InterFirst has always challenged itself to be the leader in wholesale mortgage lending; the industry's technology, innovation and sales leader," said William A. Newman, president of InterFirst. Newman added, "SatisfactionFirst represents InterFirst's leadership in action and its commitment to the success of its mortgage broker partners."

As a result of SatisfactionFirst research, InterFirst deployed two major tools to help its sales team improve revenues.

"One tool that is utilized by Interfirst's AEs is Best Software's ACT! for contact management and account maintenance," says Shane Desimone, InterFirst account executive. AEs use the ACT! to schedule multiple events such as calls, meetings, and to-do's and allow the AEs to create, apply and reuse all their action plans or campaigns. Those events can be any combination of calls, meetings, and to-do's. AEs also benefit from a Letter Manager tool that allows them to schedule correspondence.

In addition, MOAI (Mortgages Online at InterFirst), an InterFirst-developed Web service is another component in their sales automation strategy. MOAI is used by InterFirst's brokers to obtain rate locks, loan data, online funding and closing. InterFirst's MOAI allows customers to lock rates, submit loan documents, order closing documents, and request funds in real time over the Web. MOAI has provided InterFirst the benefit of increased volume per Full Time Equivalent (FTE) with proportionally lower operations, customer service and closing personnel.

National City Home Equity

National City Home Equity (NCHE) generated over $9 Billion in prime home equity revenue in 2003. Their strategy for increasing revenue is built around accessibility to the account executives. With approximately 4,500 broker relationships, they need to ensure they are managing each one individually and understanding the dynamics. NCHE also decided on the GuideMark BRS platform because it provided a customizable view for their AEs.

In the first phase of deployment, NCHE assembled a BRS launch group. As Ken Carter, executive VP at NCHE explains, "We started receiving positive feedback from the launch group during the very first day of training. After one of our executives received a call from a broker during the training session, she was able to extract a wealth of data from the new system and transmit it directly to the broker. As a result, we were on the path to generating a return on our investment from the very first day of the rollout."