As the home buying process moves online, many mortgage lenders are struggling to serve modern borrowers and attract new business. From shifting expectations, to subpar technology, to the rise of nonbank lenders and real estate portals, lenders have many challenges to overcome in order to remain competitive.
Read on to learn more about the challenges mortgage lenders are facing, and how NestReady can help lenders take steps to turn the tide.
Competition from Non-bank Lenders and Real Estate Websites
In 2010, the top five deposit-taking banks in North America (Wells Fargo, Bank of America, JP Morgan Chase, US Bank, and Citibank) accounted for 64 percent of all mortgage originations. In 2016, just six years later, these banks’ share fell to 25 percent due to fierce competition from nonbank or fintech mortgage companies like Quicken Loans. That trend has continued more recently, with originations at Citibank, Wells Fargo, and JP Morgan Chase all down over 23 percent in Q4 of 2018 compared to the same period in 2017.
To make matters worse, traditional lenders are also facing competition from major real estate websites as they jump into the mortgage industry. For example, as many as 21 million monthly visitors to the top 50 lenders’ websites also visit Zillow. If 5 percent of this overlap traffic came from motivated homebuyers, and Zillow converted an equally small fraction of them, the platform would rank among the top 10 mortgage lenders in the US. (As our recent white paper shows, even the most successful lenders are at significant risk of losing business to this trend.)
Millennials Demand a Digital Mortgage Revolution
With the Millennial Generation emerging as the dominant home buying population in the U.S., technology is becoming central to the mortgage experience. Among all buyers who use the internet in their home search, millennials are more likely than any other mortgage loan leads generation to find a lender, pre-qualify, and apply for a mortgage online. At the same time, millennials are also more likely to express frustration about key steps in the mortgage process, including filling out paperwork.
Given these facts, one might expect mortgage lenders to create better digital experiences designed to meet the needs of millennial buyers. In reality, however, many lenders seem to be falling short of expectations. Over half of all millennials don’t believe that their bank is unique, while 1 in 3 millennial banking customers complain about technology failures at their institution.
NestReady Can Help Lenders Digitize Their Businesses
To meet millennial mortgage leads’ expectations and counter competition from emerging nonbank lenders, mortgage institutions must invest in improving and implementing technology solutions throughout the borrower lifecycle.
Modernize Your Digital Presence.Your website is often a borrower’s first encounter with your brand, and can be one of the most significant: according to a classic Stanford University study, 46 percent of consumers across all industries list a website’s design as their top criteria when deciding if they regard a company as credible. With NestReady’s plug-and-play platform, you can easily create a mobile-friendly digital mortgage platform with modern design and advanced tools to satisfy even the most skeptical digital consumers.
Provide an End-To-End Homebuying ExperienceBefore or while finding a lender, consumers are also searching for homes, seeking educational content about the homebuying process, and vetting real estate agents to help them through the transaction. NestReady offers solutions for every stage in the homebuying process, including advanced property search, a realtor network of qualified local professionals, and personalized content and support. These tools help lenders connect with prospective borrowers early and often, helping them keep their brand top of mind.
Drive Mortgage Loan Leads Generation with Machine LearningWith NestReady’s digital mortgage platform, lenders can employ machine learning and AI to identify and build relationships with the most qualified mortgage leads. NestReady’s algorithm analyzes the origins and behavior of website visitors to identify users who are ready to borrow, refinance, or sell, helping lenders maximize their marketing efforts. In addition, NestReady’s AI tools integrate directly with loan officers’ CRM software of choice to suggest and automate follow-up actions, helping them take the right actions to convert more clients.