For the mortgage industry, 2020 was a rollercoaster year. Originally forecasted to come in under $2 trillion, activity started strong in Q1, ground to a halt for a moment in the Spring and then, fueled by record low interest rates, took off on a tear in Q3 and Q4, finishing at an outstanding $3.8 trillion level.
In 2020, many lenders were so busy with refis that they kept their pricing high to balance the demand. Last year, sales, underwriting and operations were the stars, and marketing played a supporting role.
While most observers expected 2021 to start strong, the Mortgage Bankers Association expects refinancing activity to wane mid-year, and overall volume to decline to $2.7 trillion, nearly a 30% decline overall. The market is also expected to shift from refinance to more purchase oriented.
This means that lots of capacity will be competing for a smaller market, and that customers won’t be knocking on their door, asking for refis. It also means that marketing will play a greater role. In order to win this year, lenders will need to understand their market, competitors, and opportunities.
Market Intelligence Is Critical in 2021
Gathering market information can be difficult, time-consuming, and expensive. In addition, many lenders expend the effort to find the data, but then get frustrated because they don’t have the tools to analyze the data to drive informed business decisions.
According to a 2020 Fannie Mae survey, mortgage lenders put the task of business process streamlining at the top of their priorities for the fourth year in a row now. And, certainly, streamlining the process of gathering market intelligence is ripe for automation.
When competition heats up, market intelligence is the key to increasing your competitive edge. You’ll need to monitor a volatile market and spend your marketing dollars wisely. Here are four things that you can do with market intelligence to help you win this year.
1. Find New Markets
Lenders need to develop effective plans for growth. The first step is to gather information about your competitors’ activity and your own in specific markets. You may find markets where no one competitor dominates the market. Focusing your marketing efforts in such a location may give you the edge you need to gain market share.
You can also identify markets where you have a much higher market share than your competitors and put plans in place to maintain that market share.
2. Analyze the Competition
Gather market information on all competitors in markets of interest. By breaking the information down by purchase and refi volume, you will be able to see where competitors are weak or strong. You’ll also gain insight into your competitors’ strategies by reviewing the types of loans they’re originating and where.
This will let you monitor for new competitors in a particular market. If you see a new competitor entering a market that may cause a disruption, you can put plans in place to mitigate the impact.
3. Invest Based on Market Intelligence
Analyzing the markets where you’ve gained market share provides valuable insight on how to duplicate that success in other locations.
You can determine where to spend your marketing dollars based on market activity and set sales goals based on market potential. Then, you can follow that data over time to see where you’ve been successful at gaining market share and use a tried and true practice to then expand in other markets.
4. Get Better Than the Competition
Gather information about the loans that are selling in specific markets. If you know the types of loans that are selling in hot markets, you’ll be able to plan marketing campaigns that are more successful. You could also find other markets with similar characteristics where selling certain types of loans -- for example VA loans -- might increase your market share.
How to Streamline Your Data Gathering and Reporting
To assist you in meeting those challenges, First American Data & Analytics has developed MarketView. You can use MarketView to get accurate mortgage origination activity reports based on extensive search coverage.
MarketView is designed for self-service access. You can save, print and email reports that you customize to your requirements. You can run market share reports by loan, sale or all transactions showing statistics for the top 100 title companies and lenders.
With access to 13 months of market trends, you’ll be able to see trend reports showing monthly, yearly, and year-over-year trends for the top 100 companies. You can even have customized reports arrive in your inbox automatically on a schedule you set.
Weekly updates from county recording systems ensure that you receive accurate data on a national basis down to the zip code level. And, you can quickly create loan officer share reports that include contact information based on NMLS data.
To find out how MarketView could help your business, schedule a meeting to speak with one of our experts.