As the mortgage industry weathers its current cycle, experiencing both elevated rates relative to the last decade and scarce residential inventory, independent mortgage origination professionals are challenged to stay nimble and productive. For mortgage originators reaching their maximum potential as brokers, it just may be the right time to transition to mortgage banking.

Further, as signaled by headline-grabbing mortgage layoffs, the competition for mortgage-lending business opportunities is growing fiercer. As legions of talented, seasoned LOs are released into the wild, it is an excellent time to remember that our industry’s natural selection tends to favor the pivoting skill — knowing when to take it to the next level is a critical leadership trait. Professionals that have weathered multiple of these cycles tend to agree that market adjustments and production slowdowns give emerging leaders a game-changing entre to a new business model. 

However, just because the timing is right doesn’t mean the competition will step aside. Mortgage pros with an eye for the independent mortgage banker model need to launch with the end in mind by assembling a competitive digital mortgage infrastructure to enable eClosings that accommodate borrower preference, operational efficiency and lower cost, eNotes that aid digital closings, accommodate real estate and title partners, attract warehouse eligibility; and digital workflow allowing digital-forward borrower experience and back-office efficiency.

While our industry has grown warmer to digitalization compared to previous slowdown cycles, emerging mortgage bankers can still achieve a competitive advantage against big-box lenders by prioritizing a digital-forward mortgage business. Leveraging technology out of the gate lets broker-to-banker players build a lean business with low overhead and fast closing times from day one. 

Also, remember that even though digital origination technology has transformed the consumer side of mortgage transactions, lenders’ back-office personnel have often not been as lucky. For instance, a decade ago, mortgage applications were strictly paper and needed to be physically completed and processed. Today’s aspiring borrowers can complete their mortgage application wherever and whenever they please through their mobile device. 

Further, consider the momentum eClosings have gained. Traditional closings can occupy an entire morning or afternoon, whereas eClosings can be completed in under 30 minutes. eClosings also save staff time and reduce related resources — paper, printing supplies, scanners, shipping materials, postage, etc. 

In contrast, eClosings (eSignature technology, electronic documents, etc.) cost a fraction of paper-based closings. As an added benefit, the labor otherwise devoted to these highly menial, low-value tasks can be redirected to areas that drive profitability, minimizing both staffing and ancillary costs. Last but not least, eClosings allow consumers to review their closing documents electronically prior to closing. This not only improves borrowers’ closing experience but also supports a more well-informed home buyer post-closing.

As an added competitive advantage, emerging mortgage bankers can partner with tech-focused warehouse lenders offering eNotes. With today’s market conditions, dwell times can be incredibly impactful to emerging mortgage bankers and quickly chew into profit margins. eNotes aid emerging mortgage bankers’ ability to offer digital closings while enhancing their relationships with existing real estate and title partners. With the secure nature of eNotes, many mortgage lenders previously ineligible for warehouse lines can move forward as mortgage bankers with full confidence that their operations are as efficient and cost-effective as possible from the start.

For brokers transitioning to mortgage banking, this technology is at their fingertips, ready to be molded and stacked as needed. Prioritizing a digital workflow allows emerging mortgage bankers to provide the digital- forward user experience borrowers have become accustomed to while simultaneously building more efficient back-office operations. 

The push of technology has also severely lowered broker-to-bankers’ barriers to entry. Emerging mortgage bankers can be strategic in their decision-making to build an efficient mortgage tech stack and strategic in their partner relationships — optimizing their infrastructure for a specific business model or enabling future pivots. Broker-to-bankers that maintain a technology-forward strategy can better serve clients and partners while enabling a scalable business model. Starting with these intentions sets up the broker-to-banker for success, allowing them to attract like-minded partners. As the de novo mortgage banker expands their mortgage business, they will be well equipped to scale and pivot during changing economic cycles. 

As the English proverb says, “Birds of a feather flock together.” Tech-forward mortgage bankers and similar-minded partners will naturally form relationships that thrive regardless of the rate environment and tight profit margins. It’s an exciting time for forward-thinking mortgage professionals, especially emerging brokers, ready to transition to mortgage banking. 

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