Loan Pricing Executive Perspectives from NYLX

A Word from the President April 2010

back to executive perspectives

The use of market information and analytics is becoming strategically important as a means to increase customer satisfaction with the lending experience and extract profits from an ever extending value chain. Building borrower confidence and throughout the origination process, avoiding time wasted on "bad loans," identifying eligibility early in the cycle, and understanding the market dynamics from inquiry to post funding are critical elements of success, achieved through the intersection of automation, information and applications. Position yourself as a "Trusted Advisor" by imparting knowledge gained through technology and information, and secure a borrower's decision to work with you and your organization.

JD Powers 2009 Primary Mortgage Origination Satisfaction Study paints a picture of risk and reward. At risk is customer satisfaction, primarily fueled by the time required to approve and close a loan. But the rewards can be rich when you focus on building borrower confidence throughout the lending experience. Here are some quick facts:

• 58% of customers with high satisfaction levels "definitely will" recommend their lender
• 60% of customers with high satisfaction levels "definitely will" consider their lender when they refinance
• Highly satisfied customers are more likely to use additional products and services from their lender, such as checking or savings account, credit card or home equity line of credit

What stands in the way of reaping these rewards is your ability to build borrower confidence and meet their needs in a timely manner. Drive your sales teams to leverage technology throughout the lending experience to build credibility and get to a closed loan. Using LoanDecisions Borrower Consultation tools, a prospect can be shown several loan scenarios for new purchase or re-financing, helping you prove you understand their needs. A 360 degree look at program eligibility, pulling an AVM or discussing mortgage insurance requirements will avoid re-work and wasted time later in the process, creating a more satisfying experience.

But what if rates are changing? We all know that market volatility is a fact of life. What if you were able to lock one or two additional loan(s) in a 20 bps market downturn (actually occurred several times during February) while meeting your prospective borrower's expectation? This could translate not in only capturing that prospect but simultaneously could add up to additional profits for you and your company.

Knowing when potentially market-moving announcements are scheduled, anticipating Investor price changes, and seeing market reaction in real-time helps Originators and Secondary Marketing manage the pipeline to a new level of profitability. NYLX puts these types of information resources at the fingertips of users through a partnership with MBSQuoteline. Know when favorable or unfavorable market conditions are about to occur, educate borrowers and give them confidence to make a quick decision, and use LoanDecisions temporary margins to protect profits.

Delivering an excellent customer experience has a huge up-side for your business (loyalty, cross-sell, up-sell). Build borrower confidence throughout the lending experience, leveraging technology to increase satisfaction, automation to reduce risk, and information strategies to maximize reward!