Ashley
While there were not many people who would have foreseen the crash of the housing markets and the slowdown that ensued in the economy, there were some companies already thinking out of the box within the mortgage industry.
The companies had already started practicing some measures that were desperately needed after the crash. As other companies were not equipped to handle a financial setback of such nature, they had to shut shop, and the numbers were not just a handful.
What the more innovative companies had done before the economic crisis, is that they had dug deeper down into grass-root levels and developed some chinks in the armor. They also added some armory to equip themselves with a few other options. Strategies like lowering the costs of securitization, improving vital service indicators like default rates, reducing the processing costs associated with every loan, and finding ways to get higher conversion rates on leads were some of the factors which led companies to answers others were still searching.
By looking to develop talent in avenues like development and architecture, financial institutions started to come up with solutions and services which would allay some of the fears of the people. They would bring back a sense of stability to an industry which was probably the worst hit due to the economic downturn.
Most of the companies (except the ones with the first-mover advantage) were not sure how to react to such conditions; while a lot of them had to close business, some of them started moving their talents to other fields. The first-mover advantage made sure they were able to train their people to handle other key areas as well, so that they would have better knowledge and understanding of how the mortgage industry functions as a whole. The industry as a whole is on a much better platform than it was a couple of years back.
Let us have a look as some of the ways in which the companies managed to stay ahead and what lessons can be learnt from them:
- After considering the requirements of the business, it is better to give customers options which can be plugged in or out.
- It is always better and more advisable to not close down or replace something completely if just some parts need replacing instead. In other words, it is best to follow a method or manner which allows for optimum utilization of resources, as it would ensure maximum returns on investment.
- It is wiser and more efficient to get into long-term deals. Companies changed the rules of the game as long engagements were not the norm earlier. Being able to deliver regularly on short engagements meant gaining the trust of customers. It led to valuable relationships, and how.
- In a world of ever-changing technology, it is best to come up with options and solutions for customers all under one roof, so that there is not much time wasted in looking for assets. Customers also feel that the company is in sync with the trends of the world or even better, a trendsetter.
The first-mover advantage from intense man-hours dedicated to development of applications helped lenders stay afloat when everything else around them was crashing. They were prepared to handle a crash whose huge proportions had not been expected. While the rest of the industry had to go through a huge evolutionary process, the companies had to make fewer adjustments, and had the time to look at others means of investment for further growth of their businesses.
