HousingWire recently spoke with Dustin Gray, CEO of Milestones Labs, about the importance of the borrower relationship and how Milestones Labs helps mortgage providers build lasting relationships with their borrowers.

HousingWire: How has the current market affected the way lenders approach customer relationships?

Dustin Gray: You don’t have to be an economist to know it’s a challenging time to buy a home or get a loan. Home prices and interest rates are high, and most Americans are financially stretched thin. This means that people will probably stay parked in their homes for longer, and transactions will drop by at least 20-30% in the next year — maybe more.

Another way to think about it is there are 110 million homes in the US – and 106 million of them won’t transact in the next year. So if you’re a lender, the question you should be asking is — how can I engage those 106 million households tomorrow? What seeds can I plant now that will grow in the near future?

From our perspective, it’s time to get busy investing in relationships and playing the long game, while weathering the storm. If you’re an LO, you need to offer your clients something that fits today’s narrative — making the most of the home that you’ve got, while being on-call to help when someone needs to borrow money or move. This is where Milestones fits in.

HW: What types of technology can lenders use to improve the borrower experience? 

DG: For the past few years, homeowner engagement has been pretty basic — mostly apps focused on home value, home equity and market reports. This was fun to look at when home values were skyrocketing but is kind of depressing when the market starts to flatten or decline. Milestones takes a much more holistic and comprehensive approach to homeownership — it’s about providing clients with solutions for all things home-related. Consumers don’t want a dozen apps to accomplish a dozen different things — they want an experience that’s in one place, and simple.

Lenders need to be focused on anything that meets customer expectations for speed, convenience, collaboration, transparency, certainty and personalization. In other words, experiences that mirror the rest of their digital lives.

They need to be focused on experiences that are on par with any national portal or direct-to-consumer lender, which I consider table stakes nowadays (website, LOS, CRM, etc.). However, what we typically see is that the focus (albeit important) is primarily on the “lead-gen-to-closing-table” part of the borrower experience. In this market, when transactions are few and far between, lenders need another set of tools that extend that value proposition well-beyond the closing table.

They need technology that creates experiences borrowers actually want to keep coming back to on a regular basis in between transactions. The experience needs to foster a sense of education, showcasing equity options, wealth management and growth, and overall financial wellbeing associated with homeownership. In doing so, they will be positioned to capture that borrower when they are ready to transact again (or refi when rates drop).

Technology that creates stronger relationships with real estate agents/professionals is also critical, as these relationships typically provide the lion’s share of a lender’s borrower leads/opportunities.

HW: What makes borrower relationships so crucial to the mortgage business?

DG: In short: the relationship is everything.

There’s a McKinsey study from a few years back that says borrowers consider exceptional customer experience to be almost as critical as getting the best rate and knowing that a lender provided an amazing customer experience (via word of mouth, referral, etc.) was the most important factor in choosing a lender. So, if you think about it, in this current market where rates are much higher than they’ve been in years, lenders need to focus on building relationships that drive this critical word of mouth/referral behavior (all while streamlining operations and reducing costs).

It starts with lenders redefining their value proposition. In our mind, the narrative goes something like this:

• I’m more than your loan officer – I’m your adviser that can help you make smarter decisions and build wealth from your home.
• When we fund your loan, I’m going to give you a homeowner portal. It’s going to show you how to take care of your home, troubleshoot problems, make improvements and educate you to avoid common pitfalls.
• At some point in your journey, you’re probably going to need money — to improve your home, get another home or pay for something else in your life. When that day comes, I’m available to discuss your options at the push of a button.

Another thing to keep in mind is that the D2C lending brands (with very deep pockets) are aggressively targeting consumers. These national players are bundling services and cross-marketing their portfolio of companies as well. Knowing that loyalty in the mortgage industry (i.e. repeat business) is dismally low, maintaining borrower relationships in between transactions is critical to ensuring that consumers don’t get swept up in these D2C marketing/advertising campaigns and funneled into their ecosystems when they are ready to transact again.

HW: How does Milestones Labs help mortgage professionals build strong relationships with their borrowers?

DG: Lending is an infrequent, big ticket transaction — which for lenders historically has meant high customer acquisition costs and low repeat business. On the surface of things, that’s a difficult business model to execute — and especially vulnerable to things outside the lender’s control.

Milestones helps mortgage professionals build trust, solve problems and provide value to homeowners at scale. The technology gives homeowners an all-inclusive homeownership experience including: home value and equity monitoring, home maintenance reminders and how-to articles, cloud-based document storage, one-click access to hire professionals for various projects around the home and much more. Borrowers actually want to come back into the Milestones platform, as opposed to a typical CRM-type experience that is merely pushing messaging one-way at a consumer. Ergo, borrowers regularly interact with and get value from Milestones and associate the experience with their lender, which builds inherent trust.

Milestones exists to help lenders increase loyalty — because most consumers transact with a lender once, and then never again. By filling the years-long gap between originations, lenders never lose touch with their clients.

HW: How does Milestones Labs help mortgage professionals build strong relationships with real estate agents to increase borrower referrals?

DG: While it’s paramount that today’s mortgage pros focus on providing an amazing experience for the borrower, they still can’t lose sight of the fact that a majority of their purchase business is going to come from real estate agents. Having technology in place that continues to bolster those relationships and provides value to real estate partners is critical.

Today, a mortgage professional can seamlessly bring their real estate agent partners into Milestones — at no cost to the agent — and allow them to provide the same toolset to their respective homeowners and prospects. It creates an ecosystem, or a “home team,” where the homeowner is getting exponentially more value.

Thus, agents get a more engaged database, increasing their repeat and referral business, and the mortgage professional is alongside these clients every step of the way.

A happy and productive real estate agent is definitely going to remember who helped them build their business. It’s a win for everyone involved.