Model home sitting next to mortgage paperwork. Source: Shutterstock.

Interest rates are still at a historic low and housing demand has remained strong throughout the pandemic, leaving lenders struggling to loan money in a more streamlined and competitive process. This demand has morphed their supply level of employees, time and money. Lenders who leverage innovation and an open-minded settlement solutions strategy are doing more with less. Centralized pricing along with product innovation are critical factors of successfully competing, as well as serving and creating raving fans, for any lenders that want success in 2021 and beyond.

On the home equity side, there are lenders still haunted by the Great Recession who are paying for full appraisals instead of complimenting their services with automated valuation models (AVMs) and hybrids, which cost much less and are ideal for nearly 80% of the deals based on the amount of the loan and the risk associated with the borrower. The key lies in naming a risk tolerance strategy that allows the lender to choose the right product in relation to the components of the loan. Turn times factor into this process, where weeks can go by before the loan is completed. Once the risk tolerance strategy is defined, lenders can begin executing their campaigns can feel confident that a sizable percentage of them can be managed through the desktop.

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