3 min read

An Opportunity for Lenders

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For decades mortgage lenders have looked for a reliable method of forming life-long relationships with their borrowers. It hasn’t happened, primarily because most Americans don’t apply for a new mortgage very often. 

While homeowners are more likely to refinance when interest rates are falling, we’re not likely to see much more of that in the future, which means borrowers will only return to the closing table when they move. That used to happen every five years or so, but as Americans are aging, they are moving less frequently.

Finally, Borrower Loyalty is Within Reach

To further complicate the matter, most mortgage loan originators don’t service the loans they write, which means that it’s the servicer's branding the borrower sees each month on the statement and not the original lender’s.

Mortgage lending is transactional and that makes it very hard to create the kinds of relationships that lead to borrower loyalty. Smart lenders have found a way to overcome this challenge.

Cross Selling to Build Borrower Relationships

Traditional banks (depositories) have long known that the key to a successful banking relationship hinges on share of wallet. The more bank products and services the consumer buys, the more tightly bound that consumer is to the bank.

That’s why cross-selling is an important competitive strategy for these institutions.

Independent mortgage bankers, correspondent lenders who sell off their loan production and mortgage brokers do not have this luxury. By specializing in the mortgage transaction, they have secured significant market share, but without additional products to sell a life-long customer relationship has eluded them.

Without the staff, infrastructure or technology to offer other banking products, mortgage bankers are one trick ponies who get taken out of their stalls every 3 to 7 years, on average.

As a result, borrower loyalty hasn’t been achievable for these institutions. But that is about to change.

The Perfect Companion Product to the Mortgage Loan

Some lenders have formed alliances with real estate brokers in order to be in position to catch a referral when a prospective buyer is in the market for a new home. But this is not the best strategy because people only shop for a new home every 5 to 7 years, on average.

Lenders should form alliances with professionals who serve prospective borrowers every year, like tax preparation professionals. 

Each year consumers complete their annual tax returns, providing a plethora of information about their financial position. It’s a treasure trove of data that can point to prospective borrowers before they even know they are in the market for a new loan. The vast majority seek out professional help to complete this work.

Of course, forming relationships with tax preparers and CPAs would have been very difficult in the past, to say nothing of maintaining them. This seasonal work means they are often out of the office except for tax season, when they are too busy to be bothered. 

Still, having these relationships will pay huge dividends to lenders.

Halcyon has launched a crowdsourced platform built on software used by tax professionals on millions of individual consumer returns that now allows mortgage lenders to easily offer tax preparation services to their borrowers by partnering with professional tax preparers. 

The service is easy and convenient for consumers, instantly connects lenders to thousands of credentialed tax preparers and provides the perfect reason for lenders to stay in touch with borrowers, year after year.

Finally, borrower loyalty is within reach of any lender.

Find out more about working with Halcyon by contacting us today!

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