Skip to main content
Thu, 08/31/2006

Brokers should seek and use the most-advanced tools to retain borrower business
Pamela C. Milano, chief product-design executive, Document Systems Inc.

September 2006 - Mortgage brokers don't need anyone to tell them how important their borrowers are. But most brokers working today are not aware of just how much their past customers are worth to their business.

Given the number of times U.S. homeowners typically refinance, change their primary residences, purchase second homes and refer additional business to their brokers, all borrowers are worth more than $100,000 apiece to the mortgage broker who originates their first loans. Mortgage brokers can only earn this if they turn each client into a customer for life.

The industry, however, has not trained borrowers to develop long-term relationships with their brokers or lenders. U.S. mortgage borrowers have so many options for financing that it is difficult for the same broker or lender to get their business more than once.
To create customers for life, brokers must change this by looking beyond simply providing stellar customer service. Brokers must use technological tools that help win customer loyalty.

The tool for the job
Most brokers use a handful of technological tools in their daily business. These include a cellular telephone, a fax machine, and a computer loaded with or connected to an online loan-origination system (LOS), a Web browser and an e-mail client. Brokers may use their browsers to connect to other online services, but most rely on services that are already connected to their LOS or that are available on their lenders' Web sites.

These are the minimum tools required to originate mortgage loans today. But they alone will not help brokers forge long-term relationships with borrowers.
In recent years, customer-relationship-management tools have become popular in financial services. Multimillion-dollar technology platforms have been offered to mortgage banks intent on forging real relationships with borrowers. Meanwhile, large diversified institutions have adopted these tools to increase share-of-wallet and squeeze more lifetime value out of each customer served.

But the technology itself is not the answer to creating better relationships with customers. The platform -- whether it be customer-relationship management, contact management, sales-force automation or a LOS -- is only a tool to help originators improve.

As important as customer service is, without the right technology, mortgage brokers may be unable to provide service levels high enough to create loyalty. The secret is in marrying the two.

Technological requirements
Winning customer loyalty requires a high level of service before, during and after the mortgage-loan sale. Brokers should seek technology that helps them do the following:

  • Acquire leads easily. Regardless of where a lead originates, brokers must track it effectively and move it swiftly toward the application process. When the lead comes from an existing customer, brokers must be able to gather the required information and move the contact into the preapplication workflow easily.

    Brokers know that they should ask past clients for referral business, but it tends to fall low on their to-do lists. The right software will make mining those valuable contacts for referrals easy. Ideally, the tool will let brokers make these contacts automatically.

  • Qualify leads easily. It's important to determine quickly whether a prospect will qualify for a loan so that the application can be provided and completed.
    By simplifying the information-gathering process, brokers can convert more leads into applicants.

    Providing closing-cost estimates early is a sure way to develop the borrower's trust. The tool must be able to generate estimates that are as close as possible to the actual costs borrowers will incur at closing. Unexpected expenses at closing are the most common reason for customer dissatisfaction.

  • Select products quickly. Brokers who consistently deliver high levels of service spend less time "working the numbers" and more time advising their clients. That only happens when they can present multiple options and can discuss relative benefits.

    New product and pricing technologies have made it easier for brokers to get a list of products for which a borrower will qualify. Integrated reference material -- program documentation, seller/servicer requirements and URLs -- and loan calculators are also useful in meeting borrowers' needs.

  • Transfer data quickly. Effective brokers turn contacts into leads, leads into applicants and applicants into successful borrowers. Retyping data as individuals move into different parts of the process is an easy way to slow down brokers and to introduce errors.

    Loan officers must be able to move prospects out of the contact database and into the LOS seamlessly. Existing customer data should be available to any system that requires it without having to re-enter the information.

    Loosely coupled systems also should be able to share data seamlessly, especially if data standards -- such as those provided by the Mortgage Industry Standards Maintenance Organization (MISMO) -- are employed.

  • Access documents easily. Be it in an application, upfront disclosures or the closing documents, information held in the contact-management system should be available to the document-preparation system. Likewise, any document required by the contact-management system -- be it marketing materials, a referral request or a loan-related document -- should only be a click or two away.

    Documents also should be available through the system locally or remotely, as needed.

  • Track customers effortlessly. Once a customer has a loan, the contact-management system should be able to monitor that client moving forward. Most successful brokers monitor birthdays and purchase anniversaries, but a contact-management system should do more.

    This system can also show terms of a deal and track changes in customer credit profiles. Brokers should have one-click access to payoffs, accelerated biweekly payments, extra payments, refinances and other reports for each client.

    The system should monitor customers with balloon terms or ARM adjustments without requiring broker attention. As market conditions change, affected customers should be notified automatically. Borrowers should never have to fend for themselves when a better deal is available.

    Brokers who offer borrowers these opportunities can strengthen their relationship and receive more referrals and repeat business.

  • Track loan status. Many LOSs keep track of the progress of loan-application processing, but few make it easy to share that information with borrowers or Realtors. Borrowers often feel out of control when they don't have access to current information about their loan status. This leads to lower customer-satisfaction ratings and a weaker broker-borrower relationship.

    Likewise, Realtors, builders and other partners feel like they are losing control of the deal when they don't know what's happening with the loan. They are unlikely to recommend a broker again if they have to tell their customer they don't know the current loan status.

  • Operate anywhere. An effective system will allow brokers to work through the Internet and on multiple computers. The technology must keep information current, regardless of how brokers access it.


Modern LOSs typically can expedite mortgage-loan-application processing. They also typically fall down in the contact-management area, however, and are dismal at automatically reconnecting brokers with borrowers who qualify for a new loan.
At the same time, LOSs are getting better through the addition of new functionality, and new software is making them less necessary from a processing standpoint.
It is likely that the LOS, as we know it today, will not be required software -- or even recommended by wholesale lenders with advanced Web sites -- in the near future. But brokers will always need some method of managing their contacts and providing exemplary service to their borrowers. Technology that meets brokers' basic requirements will help them do so.


Pamela C. Milano, CMB, CMT, is chief product-design executive at Document Systems Inc. and has recently taken over the development of DSI's LoanMagic contact-management software. With more than 25 years' experience, she has spoken on mortgage-banking-technology issues at Mortgage Bankers Association technology conferences and national conferences and has taught at the School of Mortgage Banking. Milano can be reached at (804) 777-9051 or via e-mail at Visit the company's Web site at


As published in Scotsman Guide's Residential Edition, September 2006.