As we wrap up fourth quarter, many leaders are up to their eyeballs reviewing budgets, revenue, profit margins, market conditions, and customer satisfaction. Business planning has gotten even trickier since ascending mortgage interest rates shifted the housing market into territory we haven't seen in years. A review of the current year and key performance indicators is generally part of every planning ritual. The September forecast from the Mortgage Bankers Association (MBA) estimates that loan originations will finish the year at approximately $1.7T, down from $2.3T in 2022 and less than half of 2021's $4.4T. These tough market conditions call for creative, determined efforts. You might have broken down your production in different ways: purchase, refinance, conventional, government and so on. This KPI shows what you've done; but it's possible to dig beyond these stats to find out what you missed.
The first place to look for missed business is at your partners. Producers and teams can track how many loans they've gotten from specific real estate agents; but the important question is how much of that agent's business they're actually getting. Loan officers are frequently surprised when provided with the data showing how many loans were directed by a particular agent - and to whom. This allows loan officers to plan more consciously and realistically. If they're only getting a fraction of an agent's buyer opportunities, they can ask what it will take to earn more. They can also decide how much time and resources to direct toward different partnerships depending on an agent's commitment level. Agent data can be used to evaluate current partners and target new ones.
Next, companies and loan officers should look at their market service areas. How does your company, branch or team compare to the competition? Drill down further and compare loan sizes and types to decide how to adjust your goals and approach. Who's got a bigger share of conventional purchase business with loan amounts above $400,000? Is there a particular lender with a dominant share of FHA loans? This type of information can help with recruiting as well as goal setting and strategy. You can even use the data to determine which real estate agents these peer companies and loan officers are working with. There are multiple dynamic filtering possibilities to fit your review and planning needs.
The housing industry has had to face some harsh realities this year: Refinance volume has plummeted by more than half for the last two years and is on track to do the same in 2023. There are 44% fewer loan officers in the business today than there were in 2021. Business planning for 2024 isn't for the faint of heart. Embrace the powerful data available to see where you're maximizing or missing opportunities and arm yourself with the knowledge that will help you make the best choices on what to implement, cut or deploy for 2024.
Jeff Walton is CEO of InGenius. With over 35 years in home mortgage and as a CEO and President of large national mortgage companies, Jeff is focused on helping the industry achieve high performance using actionable intelligence. Interested in learning more? Book an intro call with InGenius Data.
