Just about every mortgage loan officer (LO) and Realtor has dealt with a homeowner who thinks their property is worth more than it actually is. Therefore, the revelation by the Quicken Loans Home Price Perception Index that properties are appraising at 1.35% lower than homeowners expect, doesn't come as a surprise. However, what may raise eyebrows – and motivate loan officers to hit the phones – is that home price growth and interest rate activity have positioned nearly five million people for refinances according to Black Knight Financial Services' (BKFS) July Mortgage Monitor Report.
Highlights of the Black Knight Financial Services' July Mortgage Monitor Report
- Due to home price growth, the 600,000 borrowers who refinanced in the second quarter of this year have been replaced by roughly the same number of borrowers that now have 20% or more equity available to refinance.
- 4.41 million borrowers could likely qualify for and have interest rate incentive to refinance as of August 17, 2017.
- With the exception of the week of July 13, when interest rates ticked slightly above 4.0 percent, rates have been extremely consistent over the past 12 weeks, with only an ~8BPS variance.
The Mortgage Monitor Report points out that the dollar volume of purchase-money production has recently risen, but the number of loans closed has fallen, so it's a good time to cull your databases to ramp up the number of transactions in your pipeline, even if you have consistent post-close marketing in place.
Using the Mortgage Monitor Report to Reach out to Homeowners and Build Relationships with Realtors
Your outreach doesn't have to be a hard – or even an obvious – sell. The fact that the average U.S. property has appreciated by 6.2 percent over the past 12 months and we're seeing the highest 12-month rate of appreciation since early 2014 according to BKFS is a great conversation starter. An equity position review is something all homeowners should do periodically, but the Mortgage Monitor numbers should get consumers thinking about the following:
- Have you done an interest rate reduction refinance? When?
- Have your life circumstances shifted since you got your last mortgage?
- Have you done a personal debt analysis?
- Do you know the current market value of your home?
Whether you decide to make phone calls or send an email blast, the latest Mortgage Monitor Report is a great opportunity to get in front of people who could be one of the 4.41 million who could qualify for and benefit from a refi – even if they've done one with you before.
The home value aspect of the current conditions also makes this a perfect opportunity to invite Realtors to engage in co-marketing with you. At worst, you'll spend some quality time forging or enhancing a relationship with a referral partner. At best, you can find eligible borrowers or sellers and your outreach could present options people wouldn't otherwise know they had. Use the confluence of market events as an opportunity not just to originate more loans, but to build relationships that could pay dividends today and far into your future.