dentifying an ideal niche, whether it is audience-specific or product-specific, can help originators improve their experiences with borrowers and increase their
company’s profitability. Production staff who are experienced
in offering the unique products or interactions that borrowers
seek can deliver a more seamless, informed and all-around
positive borrower experience.
Originators who find a niche also help their companies
reduce costs as well as generate more income, because specializing allows for more focused allocation of resources. This
optimization leads to quicker processes and more efficient
loan origination, saving the company time and money.
There are many niches originators can fill — whether
they’re geographical, catered to certain types of borrowers,
philosophical or product-specific. To find a niche that best
serves their business, originators should consider both their
specific market and their personal business expertise.
As their name suggests, geographic niches serve borrowers
in a particular geographic area. Many state and regional
banks, credit unions or mortgage companies, for example,
already have a built-in business niche: that of the particular
state or region of the country where they’re located.
Geographic niches can be beneficial for borrowers who
prefer in-person, face-to-face interaction with their mortgage
originator or servicer. Borrowers will be in close proximity to
a physical branch, which provides convenience. Borrowers
also can receive more attentive, personalized service from
local financial institutions because they generally have a
smaller customer base than large national institutions.
Mortgage professionals marketing to a certain geographic niche also may be more informed about local market
trends and legislation that may be influencing their specific
states. This local knowledge can further solidify originators’
relationships with potential borrowers within their area.
IBorrower niches Many financial institutions specialize in borrower niches by
marketing to a particular group of customers. Perhaps the
most clear-cut example of this is credit unions that have a
field of membership that makes up their specific niche.
Borrower niches can provide originators and servicers
with a competitive edge through their customer- or member-centric nature. With this business model, the primary goal
is to serve a specific group of borrowers, often resulting in
friendlier and more personal service that heightens borrower engagement.
First-time homebuyers — defined as individuals who
haven’t owned a home in the past three years — can be a
particularly lucrative niche. In the third quarter of 2017, first-time buyers accounted for 56 percent of all purchase mortgages financed.
First-time homebuyer programs that feature low (or no)
downpayments and/or financial assistance to cover closing
costs can help originators get borrowers in this niche into
homes. These low-downpayment mortgages also make it
easier for new buyers to enter the housing market, increasing
the borrower pool.
During this past third quarter, 467,000 home sales to
first-time buyers were financed through low-downpayment
programs, according to a Genworth Mortgage Insurance
market report released this past December. Only 22 percent
of first-time homebuyers did not use a low-downpayment
mortgage product during the third quarter. Learning about
these programs is a good first step to serving this lucrative niche.
Some mortgage companies make an effort to serve the interests of a particular cause or community, making them
philanthropic in nature. While philanthropic niches often
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