Bill Dallas: Mortgage “do a great job creating and a really crapping job keeping”
[Note: The next Rise&Shred mortgage daily diary will be emailed Monday, December 28.]
There is only one Bill Dallas and we should be thankful he works in Mortgage. His larger-than-life persona is matched only by his inherent approachability. After the last recession, he once told a packed house at a conference that he was making a living by refinancing the same loans over and over.
The issue of customer retention was evidently a huge talking point for Dallas back then, and even now. Dallas, the founder of Finance of America and co-founder of Cloudvirga, took to LinkedIn yesterday to express his disappointment in the mortgage industry at large for not doing a better job at putting customer interests first.
“I’m depressed. I just figured out that the size of the mortgage market will approach $12 trillion in 2021 and that 60-75% of those customers are in the money for a refinance,” he said in his post.
“Since the mortgage payment is usually a client’s largest expense, you might expect that mortgage companies would be eager to please and keep their customers,” he added. “Our industry has one of the worst customer retention rates of any business – we fail to retain 80-90% – abysmal right?”
Here’s his advice for retaining more business:
1. Build a sustainable process to make the customer’s next loan experience easier, cheaper and better.
2. Offer your customers value – rewards, benefits, price
3. Ask for a relationship – get personal
4. Create comp plans and pricing plans to support the mission
5. Measure everything…what gets measured gets done!
“We do a great job creating and a really crapping job keeping,” he concludes. “Let’s change that!”
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Guaranteed Rate teams up with National Hockey League
It’s well known that Bill Foley, the chair of Black Knight Financial Services owns the Las Vegas Golden Knights hockey team. For the record, Foley wanted to name the team the Las Vegas Black Knights but ran into a trademark dispute (NYT metered paywall) and had to pivot.
Now, Hockey is getting another huge Mortgage partner.
Guaranteed Rate, one of the largest retail mortgage lenders in the country, has teamed up with the National Hockey League to become the “Official Mortgage Partner.”
The new agreement provides Guaranteed Rate with an array of exclusive marketing rights and designations that will connect the brand with the NHL, its fans and events, according to this statement.
The partnership begins with the 2020-21 NHL season, and fans will see the Guaranteed Rate brand displayed at marquee NHL events, including the Stanley Cup games.
“Our joint partnership will introduce NHL fans to Guaranteed Rate’s rapidly growing mortgage business while extending and growing the League’s reach,” said Max Paulsen, NHL Director, Business Development.
The Guaranteed Rate Companies has more than 8,000 employees in over 700 offices and funded $37 billion in 2019. In 2020, Guaranteed Rate doubled last year's loan volume, funding $73 billion. It also tripled its gross revenue (from $ 1 billion to $3 billion) and produced Loan Officers capable of reaching more than $1 billion in mortgages funded.
🔥 Mindset Going Into 2021 🔥
With Ryan Serhant
You think Zillow is a threat? Check out the Opendoor IPO
iBuyers makes up less than 1% of the mortgage lending market and we at Rise&Shred guess that’s what we don’t hear much about these companies. But to be sure, iBuyers go around loan officers and their very business model threatens the mortgage lending way of life, just as Zillow seeks to remove real estate agents from the homebuying process as much as possible.
So what’s the latest news in the iBuyer space?
Opendoor recently launched its IPO and, since then, it’s been a darling to stock investors. Now that it’s trading on the Nasdaq, Opendoor indicates it expects to make $3.5 billion in revenue for 2021 and $6.2 billion in 2021, according to its investor presentation. One speculator says that the stock is “still severely undervalued and is worth at least 161% above the price.”
If these metrics are correct, Rise&Shred estimates Opendoor may one day push past Zillow in overall market power, but it will take some time. Zillow is valued above $31 billion. But, taking into account outstanding shares of Opendoor, their valuation comes to around $18 billion.
Of course, Zillow’s presence is easier to accept, whereas Opendoor is focused on one thing: killing the careers of loan officers. And, they may
be knocking on our door sooner than later. In that investor’s presentation above, Opendoor says “we are in 21 markets and just scratching the surface.”
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