Getting Tactical for Future Success

Leaders excel when they think strategically, ensuring that all efforts and company expenditures line up with the firm’s goals for the future. That becomes difficult when the future is hard to predict.

In the home finance business, for example, everyone knows that rates will eventually fall, and homeowners will rush back to the table to refinance their current mortgages into more affordable loans. The problem is no one knows exactly when that will happen.

That is causing some lenders to stand still, treading water in the present but with high hopes for the future. That can be an effective strategy if you're profitable or have large reserves. Three years into the downturn with the cost to originate at historic highs, most lenders who try to tread water will sink.

So, what’s the answer? The strategies they’ve been developing will work great when the business returns, but what are they going to do now?

As it turns out, some of the lenders we’ve been talking to have some ideas about that.

Thinking Proactively and Acting Tactically

One mistake inexperienced leaders make is equating being busy with being effective. Implement enough tactics and no one can deny how hard you’re trying.

Leaders don’t think that way, but they are predisposed to take action when good tactics are available. With the potential for a new wave of mortgage business on the horizon, they know that the actions taken now will determine who thrives when the market rebounds.

Our discussions with leading lenders have revealed a number of crucial steps they are taking now to position themselves for success in advance of the next refi boom.

The first and perhaps most critical step involves more conversations with key employees as part of a thorough discovery process. This step will determine what they need to succeed in the current environment and what changes should be made now to make it easier to stay afloat until the next wave comes in.

These conversations are focused on leveraging existing resources and capabilities while identifying strategic investments they need to make now to propel the business forward. The key is to find the balance between prudent financial management and necessary investments in mortgage technology and processes that will set the stage for future growth.

Asking the Right Questions of the Right People

While the answers to these questions are often known to the company’s employees, it is often helpful to have third parties (ie Mortgage Cadence) support this process. Because technology plays such a pivotal role in this preparation phase, someone from the Mortgage Cadence team is often included to offer data, insights, and options.

This process involves deep introspection and strategic planning, encouraging lenders to define what they want their business to look like when mortgage activity increases again.

But this discovery phase is not just about survival; it's about transformation. Lenders need to ask themselves fundamental questions about their identity and goals:

1. What kind of lender do you want to be?

2. Will you focus primarily on consumers or prioritize your in-house users, or both?

3. Are you aiming for a balance between external and internal stakeholders?

4. Do you need an out-of-the-box solution, or are you looking for highly configurable mortgage technology tailored to your specific business model?

These questions are not just rhetorical exercises. They form the foundation of a lender's strategic direction and will guide all subsequent decisions, from technology investments to operational processes.

They open the door to tactics that can be employed now to help the company become more profitable in the short term and successful in the long term.

If you're ready to explore your options, both in today’s market and the one to come, reach out to us today. We have tools, insights, and expertise that can be helpful. We look forward to working with you.

By George Morales, National Sales Director at Mortgage Cadence 

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Media Contacts

Mortgage Cadence: 
Alison Flaig 
Head of Marketing