Monday, 16 May 2011

How A Location Intelligence Solution can Help Mortgage Lenders Navigate Through Turbulent Times

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Due to the 2008 “shake-out” of the banking industry along with the decline in the housing market in general, mortgage lending has become even a more competitive business today. During the peak of the housing market, many lending institutions provided subprime loans. As a result, these same mortgage lenders are now dealing with excessive foreclosures or threat of future foreclosures as these bad loans begin to “reset” to unaffordable interest rates. Now, more than ever, mortgage lenders need a scalable process to find the right prospect or customer. If not, they will either be acquired or simply shut down all of its branches.
Given that location comprises approximately 80% of a mortgage lender’s data warehouse, deploying a light-weight geo-spatial mapping solution provides the most economical method of targeting the right borrowers. Unlike tabular data or Excel spreadsheets, maps provide an intuitive interface where users of all types can gain immediate business insights:
  • Which competitors are originating the most loans within a 1 mile radius from my local branch?
  • Can I prove to a compliance officer that my local branch is servicing low-income zip codes in good faith?
  • Which branches can be closed due to a lack of demand?
  • Where are my best customers to up-sell better HELOCs?
  • Within a 2 mile radius of my local branch, where are the target customers for first-time mortgages? (e.g., Renters with good credit scores, starting families, etc.)
All departments of the mortgage lender will benefit through the use of the mapping tool. Because location is a key component in any customer transaction, displaying this information on a map greatly enhances any existing reporting tool. Charts, tabular data, and Excel spreadsheets fail to provide meaningful actionable information to the end user. While the Marketing team sends out less mailings to a particular zip code or census block group, the real estate group is able to determine which branch offices should be closed. Overall, the lending institution has an economical approach in finding the best and profitable borrowers despite the bleak market.

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