by William DiPaolo
In November of 2007 new software – which costs nothing – was introduced to mortgage originators nationwide. I’m referring to the latest version of our Funding Suite credit management platform.
While I try to avoid mentioning our products specifically, I’m forced to in this case because without Funding Suite – and its advanced credit proofreading tools – The Recovery Strategy for mortgage originators would not even be possible.
In this post I’ll describe what the Recovery Strategy is, and why it can dramatically improve any mortgage originators’ business. In my next post, I’ll explain how you can easily implement a Recovery Strategy in your business.
Recovery is the concept of using software to “recover” initially declined applicants. Using a Recovery Strategy will qualify (recover) 15% – 20% of your initially declined applicants immediately – and the remaining applicants sometime within the next 12 months. Further, you will be able to do this without any additional cost or resources – and with very little extra work.
Phase One Recovery: Saving 15% – 20% of your initially declined applicants.
Upon the initial credit review, the loan is usually lost either because the applicant’s scores are simply too low. These low scores may disqualify the applicant altogether, or they may indicate a rate and/or terms unacceptable to the prospective borrower. Either way, you’re forced to disengage from the applicant.
An originator using the Recovery Strategy realizes that 15% to 20% of mortgage scores are actually calculated incorrectly due to credit data errors or credit usage errors. By using credit proofreading software, applicants in this category are instantly identified and then moved to a processor trained to resolve these issues immediately, which provides a new qualifying credit score within 24 to 72 hours.
It’s important to remember that these recovered applicants never left the qualifying pipeline – they were simply moved to Phase One Recovery. Through the process the applicants are positively impacted by a level of professionalism and qualifying expertise in the originator’s business that will generate additional word of mouth business. This is a very pleasant side effect of using a Recovery strategy.
Phase Two Recovery: Saving the remaining 80% of initially declined applicants.
After investing time and money to attract an applicant to your office the last thing you want to do is to disengage from any applicant – even those which can not be immediately recovered. Now you don’t have to. For the first time, software makes it possible to nurture these applicants to qualifying status over the next twelve moths without any effort on the part of the originator. Even better, this turn-key, software driven “mortgage qualifying” service can be sold to your applicants, generating a profit up front.
Instead of sending your declined applicants away, instead enroll them your own private, secured program that will educate them about mortgage qualifying and even give them a step by step plan toward better credit health. Without any effort by the originator, the client receives twelve months of ongoing education, coaching and guidance to help them achieve qualifying status. The moment they do, the system notifies the originator so that the loan process can begin.
How much additional income would you receive by qualifying an immediate 20% of your initially declined applicants? How pleased would your remaining declines be to discover you can offer them a personal credit health program to help them qualify within the next 12 months?
The Recovery Strategy is made possible only because new software has been invented to deliver it. Its free and available for originators right now. Its very easy to actually implement an effective Recovery Strategy in your mortgage business.