Creating a successful marketing strategy is vital for the growth and stability of any business. In an inside sales environment, where 96% of the business comes from online lead applications, constant research is particularly important. Generationally, we are moving further away from a “notable book of business” in the sales world, toward a targeted, electronic, marketing environment. With housing market volatility, mortgage companies must be constantly aware of developments in many sectors. If one market falters, the ability to make adjustments will allow you to move forward. This type of ongoing industry research propels E Mortgage Management, LLC’s marketing platform and informs our nationwide licensing expansion plan. There are important considerations and statistics to consider when planning for license expansion. Including, but not limited to, the quantity of residential homeowners, market saturation (homeowners vs. licensed MLOs), state employment rate, real estate markets with increasing home values and total lending volume by state.
In 2014, there were twenty-six states that had more than one million residential homeowners. Based on the number of homeowners, one could conclude that there is a market in those states for our skilled sales staff to come in and use their knowledge and persuasion skills to make their mark. But we must look beyond the number of homeowners in any given state and must also look at the amount of licensed loan originators there, as the greatest sales opportunities lie in areas where there are fewer MLOs compared to the number of homeowners. California has approximately 6.5 million homeowners and in excess of 42,000 licensed loan originators all fighting for their business which gives the state a saturation level of 1 loan officer for every 152 homeowners. In contrast, South Carolina has approximately 1.2 million homeowners with only 4,500 licensed loan originators, resulting in a saturation level of 1 loan officer for every 260 homeowners. Clearly less saturation will afford more opportunities for E Mortgage Management, LLC to develop a significant market share in a new state market.
After the crash of the housing market between 2006 and 2008, federal and state underwriting guidelines were tightened, with stated income and no-document loans becoming things of the past. As the health of the industry improves, we look to the employment rates of each state to help determine if the state is a possibility for expansion. A borrower’s debt to income ratio is one of the main factors scrutinized when qualifying a borrower. The states with the lowest unemployment rates, in addition to having in excess of one million homeowners are: Minnesota (4.2), Colorado (4.3), Massachusetts (4.7) and Virginia (4.8).1
Another consideration in expanding our mortgage market are the home values in a prospective state. Home values across America may fluctuate based on local educational opportunities, crime rates and proximity to commerce. Economic growth in a community can lead to new construction and housing upgrades in turn, increasing home values. By contrast, a decline in the economy can lead to foreclosures and/or a slow selling market, which will decrease local home values. We are more confident in the housing market, as nationally we have seen a 7% increase in the median home list prices over the last year. The states with the “hottest” markets presently are California, Colorado, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Pennsylvania, Texas, Virginia and Washington.2
Lending volume in a particular state is important because narrowing the number down to how much outstanding, residential, loan debt currently exists in each state allows you to make opportunity calculations. The five states with the most lending volume in 2013 were California, Texas, Florida, Virginia and New York.3
E Mortgage Management, LLC is presently active in New Jersey and Pennsylvania. After taking state-specific testing requirements for licensing and brick-and-mortar costs into consideration, our favorite picks for expansion right now are: Florida with the 9th highest employment rate and the 6th least saturated market. Florida is also on the “hot list” for increasing home values and 3rd in highest lending volume. Minnesota requires another licensing test but has the lowest unemployment rate and is the 15th least saturated state, coming in 18th in overall lending volume. Illinois is another option with a low unemployment rate of 5.8 and a saturation rate of 173 (relatively high) but that is balanced by it being 6th in lending volume.
The housing market is ever changing and we closely monitor each and every change to ensure that we are aware of fluctuations. Fortren recognizes the importance of a strong marketing platform as one of the many benefits that we provide to our employees. Being able to convert leads effectively lies not only on the MLO’s ability and work ethic, but on our company discovering the best market!