We Polled 200 People: What Are the Biggest Impacts on Retail Origination?

The mortgage industry is influenced by a complex interplay of factors that shape the dynamics of retail origination volumes. At Dark Matter Technologies, we recently surveyed a room of 200 industry professionals who provided valuable insights into these influences. I was fortunate enough to be one of the surveyed individuals and was eager to see how my thoughts compared to the masses. We ranked the impact of elements such as interest rates, housing supply, pull-through rates, market outreach, borrower-centric tools, and realtor compensation; the survey highlights critical areas of focus for industry leaders. This article unpacks and ranks the importance of each factor, providing insights into their impact on the mortgage sector. Below, I will list the rankings from the group followed by my personal views as a 34-year-old husband, father, and avid surfer working in the origination tech space, looking to buy his first home in San Diego.
Exploring the Influencers of Mortgage Dynamics:

1. Interest Rates: Group – 1 | Wes – 2

It is no secret that interest rates are the pulse of the mortgage industry, directly affecting borrowing costs and consumer demand. When rates are low, demand typically increases, but with recent high rates, the market can stay cool for a long period of time. In surfing, watching the tides and waves to decide when and where to paddle out is essential. The same goes for keeping an eye on rates and their direct impact on our industry. So, what do lenders need to do? Lenders and surfers alike have no control over these variables. You have to ride what you’re given – today’s rates seem high relative to the recent past, but aren’t that high from a historical standpoint. Yes, it affects refi volume, but people who need to buy a house still need to buy a house. The impact on affordability is real, and the effect of higher rates when people are accustomed to lower rates can have a chilling effect on demand. The question SHOULD be, what is your organization doing to execute better than your competition so those borrowers in the market come to you. This leads us to number two…

2. Housing Supply: Group – 2 | Wes – 1

The challenge of a constrained housing supply remains a significant hurdle, influencing everything from pricing to market accessibility. This was my number one pick because in San Diego, the quest for finding an affordable house (especially by the water) is as competitive as the mortgage market itself. While lenders can’t directly impact housing supply, the correct technology tools can help them strategize effectively around financing options to meet consumer demand. Creative loan programs to help a borrower compete with cash offers have gained some traction, but arming a borrower with proof of their ability to finance the home as quickly as possible is still one of the best tools to help borrowers compete for their share of a limited supply of homes.

3. Increasing Pull-through: Group – 3 | Wes – 4

As someone who has worked at both a lender and a vendor, I became very aware of how important improving pull-through rates can be for efficiency and profitability. I selfishly put it at 4th but understanding its importance to the lender community in the room, it was not shocking to see this come in at 3rd place. Automation is nothing new to the mortgage process. The ability for that automation to have access to all the data on the loan helps a lender fine tune the timing of service orders, helping to reduce the cost of fall out. Dark Matter has been focused on automation for over a decade and uses of AI/ML for more than seven years. With our AIVA Rules and AIVA Virtual Assistants, we can also reduce the time it takes to identify loans which won’t make it to funding. Our AI-driven platforms streamline the loan origination and underwriting processes, reducing errors and improving the speed and accuracy of loan approvals as well as declines, which in turn helps boost pull-through rates and reduce the impact of applications which can’t make it to funding.

4. Reaching More Prospects: Group – 4 | Wes – 3

Depending on where you fall in your organization, you will either be more pull-through focused or lead-gen focused. Since I run marketing for Dark Matter, I put reaching more prospects over pull-through because I feel that expanding your reach is essential for growth. You can have the best automation in the world, but you need prospects and clients to put through your automated technology gauntlet. Expanding outreach in today’s digital-first world means leveraging online platforms and tools to connect with a broader audience. Finding technology that offers lead generation and integrated CRM solutions to optimize your conversion strategies allows lenders to reach more potential borrowers effectively.

5. Online Tools for Borrowers: Group – 5 | Wes – 5

In the digital age, offering cutting-edge online tools is as fundamental as having a solid home base. Borrower-centric tools should be designed to make the mortgage process as straightforward and user-friendly as navigating your favorite streaming service. Dark Matter Technologies is working to enhance the experience of our own borrower portals through work to simplify the application process, provide real-time loan tracking, and task notification, making the mortgage journey accessible and transparent for borrowers. For me, this is crucial to the homebuying process since every other important document/decision I make can be made from my phone.

6. Buyer-Side Realtor Compensation: Group – 6 | Wes – 6

While it may have ranked last, the state of realtor compensation can introduce confusion and concern for a first-time home buyer. It’s becoming increasingly necessary for loan officers to be prepared for those discussions with their borrowers, supporting a smoother transaction process.

Reflecting on the insights, it’s clear that understanding these key factors is crucial for navigating the current and future mortgage landscape. Finding the right wave takes patience and persistence, but you must have a plan when it comes and execute that plan flawlessly. Getting yourself prepared in those moments of waiting are essential for future success. When a business opportunity comes, it’s great to know you have tools and a team necessary to execute. No matter how big that wave of volume may be.

At Dark Matter Technologies, we’re committed to leveraging these insights alongside our deep domain experience and technological expertise to not only meet but exceed the expectations of today’s lenders and borrowers. It’s about staying informed, adaptable, and occasionally enjoying the view from where we stand. These results illustrate the varied factors impacting the mortgage industry today. For industry leaders like Dark Matter, understanding these dynamics is essential for developing strategies that not only respond to current trends but also anticipate future market shifts. By integrating advanced technological solutions into every aspect of mortgage processing, from origination through to closing, Dark Matter continues to lead the way in transforming the mortgage landscape, ensuring efficiency, transparency, and customer satisfaction.

Want to learn more? Talk to an expert today.