I’ve said for a while that the mortgage recapture game was going to ramp up and get more aggressive.
Customer retention has always been a big thing in every industry, but thanks to new technology and “AI,” companies are getting better at it.
Many of the largest mortgage companies have also been growing their mortgage servicing portfolios for this very reason.
Instead of handing off their borrowers to third-party companies, they’re retaining servicing rights so they can mine their database of homeowners for future offers.
And with mortgage rates finally showing some real promise, there could be a lot of opportunity going forward.
The Refi Boom Is, Apparently, Here
UWM just proclaimed that “the refi boom is officially here,” and wants to make sure its mortgage broker partners are “ready for it.”
To help give them a boost, they have launched a new initiative called KEEP, which leverages artificial intelligence (AI) to help brokers stay in front of their old clients.
The way it works is fairly simple. It continuously scans the data from UWM’s portfolio and identifies borrowers “who will benefit from a mortgage refinance.”
Once a match is found, it automatically sends an email to the customer with a pre-validated offer, including the contact information of the originating broker.
Borrowers will see their current monthly payment, estimated new payment, and estimated monthly savings.
It will also include disclosures such as the loan type, loan-to-value ratio (LTV), amount of discount points required, and APR.
It’s unclear what the threshold is for an offer to be generated, but UWM says these offers will be sent to borrowers “as soon as a borrower is able to obtain meaningful savings on their monthly payment.”
From there, all a borrower has to do is review and submit a pre-populated loan application, which then winds up in the broker’s pipeline.
It appears to be the next iteration of what may have been the old process, a manual outreach campaign once brokers found possible refinance candidates.
Now they might not have to do a thing other than log on to the UWM dashboard and check to see if any new loans dropped into their pipeline. Talk about a nice surprise!
Good News for Brokers, But Borrowers Should Still Shop Around
While this new initiative will likely be great for both UWM, the nation’s #1 mortgage lender, and its broker partners, borrowers still need to be diligent.
Sure, it’s convenient and easy to get emailed a mortgage refinance offer and simply respond and submit the pre-populated application.
But it’s not always about easy, especially if we’re talking about saving money. Sure, you can hear the broker out and discuss the offer.
At the same time, you might want to speak with other banks, brokers, retail lenders, credit unions, etc. to see what they can offer. Maybe they can beat the rate/fees.
As I’ve mentioned time and time again, you need to compare mortgage brokers too, as their pricing and service can vary widely as well.
Many of them work with different wholesale lenders and have distinct compensation structures. That can affect mortgage rate pricing a lot.
Now there’s nothing wrong with loyalty, especially if you enjoyed the prior experience with your broker, but you also have to ensure they still offer competitive pricing.
One month lender X offers the lowest mortgage rates, and the next month lender Y is the price leader.
So as I’ve said before, when a lender reaches out, reach out to other lenders.
This is especially true when we’re talking about a rate and term refinance, which actually needs to save you money to be worthwhile.
A week ago, UWM also launched Refi75, a 75-basis point pricing incentive for conventional, FHA and USDA rate and term refinances, as well as for FHA Streamlines and VA IRRRLs.
Be sure to look at the big picture, including the final interest rate and all closing costs, to effectively compare offers.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.