In case you missed it, the market hasn’t just shifted, it’s completely changed. For the past couple of years, lenders and LOs have been riding the wave of low rates and high volume, but with refinances shrinking, now is the time to adjust to achieve success in 2022.
In this new podcast, ICE Mortgage Technology’s DeLaine Nick, Director of Growth Marketing, is speaking with industry leader and CEO of Mortgage Champions, Dale Vermillion. Listen in as they discuss what lenders need to do now to win more business. Plus, learn the best practices for balancing technology and relationships to ensure borrowers are at the center of the transaction every time.
Welcome to our open house. Instead of examining hardwood floors, closet space, and kitchen layouts, we're taking you on a tour of what's happening across today's mortgage industry. During each episode, we'll hear from industry leaders and subject matter experts to give us an inside look into a hot topic, cutting edge technology, or new trend that can help accelerate your digital journey. Thank you for joining us. Come on in.
Hello and welcome to another episode of the Ice Mortgage Technology Open House Podcast. My name is Delaine Nick, Director of Growth Marketing here at Ice Mortgage Technology, and I am excited to welcome our very special guest and dear friend Jill Vermilion, CEO and Founder of Mortgage Champions.
Ideal. It is so great to finally sit here and meet you in person. It's awesome. After all the times that we've talked over Zoom meetings and everything else to get face to face and hang out. Love it. Thanks for having me on. Absolutely. In today's episode, we are going to talk about how to reset your business for growth in 2022. This market, it's it's truly something and everybody has been talking about this shift and they're really concerned about it. And in my eyes, I don't think it's really shift. I I think it's changed.
And in fact, I read up with MB A and they reported that the refi market has actually dropped to less than 50%. You and I both know that this is, this is going to impact lenders pretty significantly because they were riding on this wave of success with low rates and high volume in a really, really heavy refi market. So they must be feeling on edge, especially since refi is shrinking pretty fast. I know you have great experience and.
You consult with lenders on a daily basis. So I'm just curious and I'm sure our audience members are curious too. What are you hearing from them and what are some of the main concerns that they are expressing with this shift? So First off, Delaine, you're dead right and everything you just said. But but the fact of the matter is we shouldn't be one bit surprised by this. We we knew this was inevitably gonna happen. This is always an ebb and flow business that we're in. I've been doing this for 39 years.
And just the seventh time I've been through a major market shift, you've got to go into this with a couple of basic things that you need to understand and #1, you have to have a positive mindset about it. Now I know some people right now are like rolling their eyes like bail rates are up to mid fours. We're in the mid twos just four months ago. How can we have a positive spin on this? Well, think about that for just a minute. Okay. Today's economy is one of the most challenging economies we've seen in.
Since 2008, consumers are concerned and worried about their security and about their stability and about saving money. All of those things play right in the hands of the mortgage arena because the refinances and through purchase transactions. We provide home ownership, which is the American dream. We can help people lower their payments, get access to cash equities higher than it's ever been. There's a lot of actually great things about this marketplace. So view the market for the opportunity, not for the obstacles. The obstacles are obvious. Rates are up.
Okay, what does that mean to refi? Well, MB A told us at the end of last year we'd see a 63% drop this year. That shouldn't be a surprise to us in refi, but they also said we'd see a 6% increase in purchase. So shift, shift your mindset. We're now if you're heavy refi, bring some purchase and offset that and shift your Refi's from a traditional rate and term, which was the last two years to an old cashout debt elimination mindset. That's really what the new marketplace is.
If you do those two things, you're going to pick up a lot of purchase business to offset some of that loss. You're going to pick up because you're doing cash out, debt elimination, larger loan sizes on your refi's actually be able to help consumers in a great way. And when you combine those two things and really focus on conversion, not volume.
And the key is, is combining 2 things what we both do technology, ICE technology to get efficiency with relationship, which I always believe in. When you combine those two things, it really works well. Yeah, that's awesome. And I know you, you keep on mentioning that this is an opportunistic market that's raising a lot of eyebrows and actually a really exciting time to be in the mortgage industry. And there is going to be a challenge, It's it's going to be tough for these guys to adjust and succeed in this.
Just driven market, but there is room for improvement. But if you could boil it down, what are your top proven tactics and activities that leaders can provide their team to win more business in 2022? Well, First off, you know you have to remember the one rule of thumb in a rising rate market and the rule of thumb is when rates go up, activity goes down because consumers when they wake up and see rates at 4 1/2 when they've been seeing them at mid twos for a long time.
They're not knocking down the doors or dialing your office to talk about a refinance. So on the refi side, what you have to understand is you've got to make sure that you diversify your lead sources, that you really start to mine your databases better than you ever have before. And that I mentioned in a moment ago, you focused way more on conversion.
And making sure that every single lead, every single referral, every single opportunity to get your hands on you, take that thing to the nth degree to convert it. So that means more time with your customers, more relationship, more advice and less order taking, shifting out of a rate quoting mindset into a value based mindset and really making sure you're attacking that refine market. From the vantage point of it, it's not a rate and term market anymore, it's a cashout delimination market on the purchase side.
Look, purchases are going to be record numbers this year. Everybody talks about inventory, Okay. Inventory is a challenge for consumers, but there's plenty of inventory to allow us to be able to have a record production year this year. So what you got to focus on with your customers is help them get into a contract, help position them to be the best buyer they can be to the seller. So you get more contracts and less approvals. Approvals don't do you any good right now. What does you a lot of good is contracts. So if you make those two shifts in this marketplace as leaders, you're going to have a.
Great result in keeping that borrower committed from the first contact to close loans borrowers, they do not want a mortgage. No one looks forward to a mortgage. They want that dream of home ownership that is the American dream. Borrowers, they're setting these expectations of their lenders upon the first contact. What is it that borrowers really expect from their loan officers?
To purchase a loan, it's not about providing one them with the lowest rate. So can you provide some insight on that? Advice, guidance and education are the three things today's consumer wants. They don't want a mortgage because they don't want to be sold. That's what they're used to in the past, you know, it's it's interesting to me. I've taught this loan officer for years. When you get a customer that contacts you for a loan you've never talked to before, it's stranger talking to a stranger about the biggest financial transaction in lifetime. And they've never had a great experience. And how do I know that? Because they're not talking to the last person they got a loan from.
If they'd had a great experience, it went back to them. So you got an opportunity in your hands to create that great experience in today's market. How do you do that? Starts with great advice. If they're buying a home, give them great advice on how to compete in this competitive marketplace on a purchase, so you get a contract. If they're getting a refinance, give them advice on how to get the right loan terms and the right loan configuration to help them put.
Them in the best financial picture and then guide them through the process like that. That is so critical. Borrowers can go anywhere today and do a mortgage completely online, but they don't want to. They want somebody to walk them through and guide them through the process as a human being cuz it's such a big decision. So guide them and then just educate them on the right approach you take if you provide those three things.
You become invaluable to your customers and they actually enjoy the experience and they buy in droves. I tuned into a podcast that you had and you had said that 92% of borrowers in 2022 will do business with the first or second person that they talked to. And I think those are some pretty great odds and you never get a second chance to make a first impression. So what is it that loan officers can do to make a good lasting impression on their borrowers? So they are #1.
Yeah, Number one, number one rule and you know ICE does helps us with this better than anybody. Be responsive, get back to your customers and your realtor partners in a purchase transaction right away. Responsiveness is always you look at every survey of any consumer for consumer experience in the mortgage arena, it always comes back to.
Did they get back to me on time? Did they respond to me quickly? Did they answer my question? So be responsive. Is number 1, #2 really settle in and get to know your borrowers. Don't, don't just don't be an order taker where you just handle the topical need, but dig into what do they really want. There's a lot underneath the surface. You got to unpeel to understand the right term for the loan, the right configuration for the loans, write down payment for their situation. You know the the right amount of cash that you got to provide in that refinance to make it make sense.
And then stay in, we get the application and then it goes into operations, never to be talked to again unless there's a problem. Don't be the person that only calls them there's a problem. Stay in touch with your borrowers throughout the process to nurture the relationship. Again, you guys have technology that does a great job to help them do that automated so that it presents that to the loan officer so they can be excellent what they do.
And the work's already done for them. They just gotta have the conversation. Is there any value added service that they can provide to attract new customers and get those referrals? What could they really do to differentiate themselves from the competition? I think the answer again is education. It's, you know, today's consumers are really confused by the marketplace, especially in the purchase world. You know, property goes up on the market.
They like the property, It's gone by the afternoon. If you're a loan officer and you're going to win that deal, you've got to take that bar and you got to educate them to understand, look, you can't be looking at one property First off, you got to look at four or five within your price range and let's get you in and get an application and a pre approval as humanly fast as we can.
And let's get that offer out to your Realtors and then present those offers to the Realtors. Don't don't e-mail the offers because you're just another pre approval offer. Make sure you position it where you're calling that realtor, presenting that bar on on a silver platter to them. These little things, these little nuances make all the difference in today's marketplace to separate professionals from average employees. You've been speaking to this too around around technology and there there is a balance between technology in maintaining those relationships.
To keep your customers at the center of a transaction and we did recently release our Borrower Insight survey and we found that 74% of borrowers who have gone through the mortgage process in the past two years think an online mortgage process makes buying a home easier.
Than it is in person. And you know, I can actually speak to this because my sister she recently bought a home in Tennessee sight unseen FaceTime only. And they by the way did not go with the lowest rate. That's what she was shopping for initially. But she did not go for the lowest rate. Actually the loan officer who socalled offered the lowest rate never followed through. So she went with second best and she had a phenomenal experience. She was.
Not stressed out because it is really stressful. The process is really stressful and it's daunting and because that loan officer was so responsive, so quick to her needs and educated her throughout the process, it made for a great borrower experience and everything was done online over the phone very quickly. And you know, you always say technology should enhance relationships and not replace them and it's not a matter of.
Embracing automation, you know, I think at this point they've really got it implemented to succeed in this changing market. You know, with volumes decreasing because we're seeing it, we're starting to see a trend of traditional retail loan officers shifting to a hybrid model whereby they're supplementing their pipelines to purchase leads.
So tell us more about this new change and how loan officers are leveraging technology to meet this demand and grow their business. I thought it was interesting how many things I heard you just say with your sister's experience. They were exactly what we talked about. You mentioned education, you mentioned responsiveness. Technology is critical, today's success. But I want to say this because when I hear statistics like 74% of people say that doing it online is better. What I also want to caution people to understand is that only works if you're working with.
With your customer through that and you're copiloting that technology, you're not just saying Oh well 74% of people want to do that. So I'm just going to shoot a link to everybody. I I have this phrase I use called link pushers. You don't be a link pusher. Those are the ones who just shoot a link to the borrower. They they basically let the borrower self-serve and then all they do is come in to give them a quote at the end. That's not what your borrowers want from you. What they want is they want the efficiency and the ease of online, that's what they want, but they still want that person that's standing behind them.
Walking them through that process. So when you send that link, you do it while you're on the phone with that bar. You copilot that process so that as they're going through, you can answer questions about any places they get jammed. Because there's three big places on online technology that consumers get jammed up. Social Security numbers, always one, birth dates, always one. And then when it gets that, upload your documents. There's a lot of drop off there.
Unless the loan officer is there with them and says no, here's why we need to do this. Here's the benefit to that. So complement your technologies, work alongside of it. Don't make it a standalone. But you're not going to be successful without it either. Don't think you can go back to the old days of paper applications and you're going to compete in this marketplace because that's not what consumers want. They want the ease of technology with the support of relationship, high tech, high touch.
Only way you're gonna succeed in this marketplace. I love that. And it's just it's such a great motto and people can can live by that. The high tech, high touch model. You know, we talked about it the other day. I mean you meet with multiple clients today thanks to online, right, Because it's to go travel all over the world. You're talking to them and you're coaching them and you know, obviously technology does come up in the conversation and so you know, what are, what are your clients looking for?
A partner when investing in technology to ensure that they keep their borrowers at the center of transaction. The key to keeping the bars at the center of transaction with the technology is to make sure that you are building it so that it's efficient. And you guys have already done this, you've mastered this build it so it's efficient to the consumer and easy to use. But it's also guiding them into the actions and activities that will ensure that they can get an actual closed loan quickly. Speed is very important in today's marketplace.
Especially in the purchase side of the transaction like we talked about. So we wanna make sure that we're augmenting our technologies to create that efficiency to crush those turn times down, More importantly crush those pre approval times down so that if a customer calls and says I wanna buy.
We can have an approval for them by later this afternoon that we can present to a realtor and get them actually in a market to get a contract. That's what you have to do to compete because you don't want a big pipeline of pre approvals that nobody's ever getting contracts because that's just a lag on your business. And just to wrap things up because I love this story, Bruce Thompson, that's loan officer in the world. Can you tell the audience who this guy Bruce Thompson is and.
How they can find a Bruce Thompson within their organization years ago, but my wife Laurel and I, we lived in Chicago most of our lives and when our kids were young we decided we wanted to get a lake house, a place that we could build memories, a second home to take him to, to get away from the business of life. So we looked for like 4 years. We fell in love with this place, a little town called Camp Lake, WI. We made an offer and back in those days, this is 20 plus years ago. Back in those days if you made an offer and someone's made an offer, there wasn't negotiating like today. It was just basically whoever closed first got the deal. So realtor call said we got two offers, whoever.
Whichever one you can get approved and get this thing closed, You're going to get this house. So we were in a race. So I go home Monday morning, I call my local bank, call the the bank president I'm friends with. I said, man, I need a loan. I need a quick. And he's like, okay. I got your guy. His name is Bruce Thompson. You'll be hearing from him like okay. Well, I'm thinking this guy's going to call me in like 10 seconds. I sat at that office 7 hours went by, never called me. And I'm thinking.
What's so great about this guy? All of a sudden the phone rings like 3:30
in the afternoon. Get on the phone, he goes, Mr. Vermilion, this is Bruce Thompson. I'm like, yeah, he goes, I have one question for you. The question is, can you come to the bank on Friday at noon? And I'm like, well, yeah, Bruce, I can come in at noon. But if I'm coming Friday at noon to fill out my application, we're going to lose this home. And he goes, Mr. Vermilion, I think you misunderstood things. I go, what do you mean to misunderstood things? He said, I'm not asking you to come in on Friday to take an application. He said, here's what happened. You called the bank president this morning and said you need it at home.
He said I would have you call him. So what I did was I went and pulled your file. I know you're a speaker for a living. I know you travel and you're busy. So what I did was I pulled your file. I happen to find that there was tax forms in there. Happen to notice that you've been applying a long time. We pulled your credit. I went ahead and ordered your appraisal, your title, and everything we need to do.
I've literally got you approved and we got a closing set Friday at noon. Are you coming or not? What else could I say? I called my wife, Laurel. I said, honey, you're not gonna believe that She said what I said Bruce Thompson. She said, what are you talking about? I said we're closing on Friday now. She said that's impossible. I said Nope. Now with Bruce Thompson, funniest part of the story is, you know, she had the nerve to ask me when I called her. What was that? What's the rate? Oh, my gosh, of course.
We had no idea. I forgot to ask. This is the kind of service we've got to create for people. We've got to create an environment where we make it easy for them. This was pre technology. He made the process so easy for us. Today we have ice technology today. We've got every tool at our fingertips and we don't even use them properly. But he also understood relationship and Bruce did 12 loans for my wife and I over the next.
18 years. Oh my goodness. And I'm sure that you recommended him to everybody. Everyone and I went all over the country saying his name is. Funny thing, I was on this circuit called the Closmore University Circuit traveling all over the country for years speaking. We were doing 2 and 3000 people in the audience at these at these conferences.
And we had this team of guys in the back that heard that story every single time and they thought I made the story up. And I was down in Miami, FL. Bruce had retired in his mid 40s because he's done so well. And I called him up, said come to the conference, I'm going to put you up on the stage. And when he walked up, these guys were like, that guy really does exist. I'm like, this is the real Bruce Thompson. You remind me of someone who's that Bruce Wayne.
Hey, Batman sucks, right? I know. I'm surprised. You're not my favorite person. I'm not wearing your Batman shirt. But no, you you are. You're awesome, Jill. And you're a superhero to to all of us. So thank you so much. You're way too kind. Oh, feelings mutual. You know, I I look forward to many more opportunities of working with you. Well, you're the bomb. I appreciate you appreciate ice mortgage technology. Great, Great group. Great company. Thanks for having me here. This is a real honor. Absolutely. We'll do it again.
We'll do it. All right. Thanks, Lee.
Information contained in this audio was obtained in part from publicly sources and not independently verified. Neither ICE Mortgage Technology nor its affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.