The 'treasure trove' many LOs ignore – and why you shouldn't

Even in times of crisis, originators have a steady source of new business – but most don't even think about it

The 'treasure trove' many LOs ignore – and why you shouldn't

If Richard Grieser could tell mortgage originators just one thing, it would be this: “You have a treasure trove sitting underneath your fingertips. You don’t even need to be looking for new business right now. You could fill up your pipeline simply by looking at your (previous) borrowers’ needs.”

Grieser, vice president of marketing at Sales Boomerang, said that’s even true as the COVID-19 pandemic batters the economy.

“We’ve got a bunch of clients, and a lot of them are doing very well in this climate,” he said. “People are still selling homes, and refis, obviously, have gone way up. Our business itself has been growing like crazy.”

Sales Boomerang helps lenders capitalize on what Grieser said is their most valuable asset – their own database of past borrowers.

“What we do, essentially, is when a borrower becomes eligible for a loan, we notify the lender,” he said. “Let’s say you’ve got a home you own, and you have 80% equity in the home, so you’ve owned it for a while. But say you have $40,000 to $50,000 in high-interest debt – it’s a good time for you to do a refi and take out some of that cash that you have built up in equity, pay down that high-interest debt, and maybe get a better rate and have a lower payment. We send alerts to the lender and say, ‘Based on the data, we know it’s a good time for this borrower to get a loan.’ It’s incredibly effective.”

Those alerts result in an average loan close of $263,521, Grieser said.

“In our average client’s database, 2.48% of those borrowers are becoming eligible for a loan every month,” he said. “That’s a huge number. If you take that and add it up over a year, that’s a lot of business. From the alerts we’re giving, we’re getting about 49 loans per client closing, on average. That’s a lot. That results in about $13 million in loans.”

Unfortunately, most mortgage professionals don’t fully realize the value of their own databases, Grieser said.

“The average lender looks at it as a one-and-done transaction, and then (the borrower) falls into this bucket where periodically they’ll reach out to the borrower – and it’s usually at the wrong time. If you just filled up your gas tank at the gas station, and some guy has a bunch of gas and says, ‘Hey, do you want some gas?’ – even if that person is selling it cheaper, you’re like, ‘No, I just got gas. This is the wrong time.’ What we’re doing is making it relevant and timely for every single borrower in a lender’s database.”

Mortgage pros who do internalize that lesson, Grieser said, are seeing results – even during the coronavirus crisis.

“Even in this time, our clients are doing well – and they’re doing well because they’re finding out that their borrowers need loans,” he said. “What we’re doing is helping them retain their borrowers. Their borrowers aren’t leaving them and going to other lenders, because they’re actually contacting the borrower for a meaningful reason.”

Grieser said that it is “fundamentally important” for originators to change their mindset when it comes to their existing database.

“Think of it like this. If you had an asset – say you had $500,000 – would you take the $500,000 and shove it under your mattress, or would you invest it and try to make some money off it?” he said. “That’s what a lending company is doing – it’s building up this asset of borrowers. And if you’re not working at investing in those borrowers, then you’re not taking care of that asset, and it’s depreciating over time. What we’re doing is taking care of that asset. You need to treat your borrowers like an asset – and that’s a different frame of mind. But our lenders that are doing that are just killing it – it adds 10%, 20% to their business. … And borrowers respond to it; if you’re really thirsty, and someone right next to you is selling water, you’re going to be very happy that person is there. It’s very different than someone walking up to you when you’ve already got a water bottle in your hand.”