Mortgage lenders today face daunting challenges. Despite the wave of rate/term refinances we saw in Q4, the lender landscape has evolved such that there is no guarantee your customers will turn to you for their next loan. In fact, retention rates are at multi-year lows and continue to remain sluggish, particularly among cash-out refinances, which is why it is critical for lenders to find creative, cost-effective ways to retain customers.
On the purchase side, housing supply remains tight. And, with an influx of new entrants developing new home purchase and financing strategies, acquiring new customers is more competitive than ever before. Given this environment, how can mortgage institutions hold on to the customers they have and acquire new ones?
A Universe of Data
We live in a world inundated with data, and the mortgage industry is no exception. In fact, an abundance of valuable data is available to help improve lenders’ growth and retention strategies. The challenge is organizing this data for modeling and other advanced analytics, which can be a very complex, costly and time-consuming process.
Black Knight developed a unique solution — the Rapid Analytics Platform℠ (RAP℠) — a “virtual lab” for organizations working with big data and complex analytics. RAP provides a lender’s data scientists and analysts with a powerful workspace to source data, execute queries, create advanced analytics and train machine-learning models.
In RAP, all of Black Knight’s diverse data sets are loaded and ready to go — no “data wrangling” is required. The Black Knight data available in RAP includes comprehensive public property records, MLS listings, our loan-level mortgage performance data, Black Knight’s Home Price Index (HPI) and AVMs. RAP also provides access to our advanced predictive analytics and pre-built models — indispensable for developing effective growth and retention strategies.
Users can upload and merge their company’s data, as well as external data, then apply analytics to the combined set with Black Knight data. Additionally, since RAP supports multiple programming languages, any model currently used by a firm can be deployed within the RAP environment — maximizing existing investments.
RAP for Growth and Retention
RAP provides numerous ways for a bank to develop more effective growth and retention strategies. For example, a bank could run its portfolio of retail, non-mortgage customers against the Black Knight Propensity to Transact Model within RAP. The model merges the bank’s data with public record information, MLS data and AVMs to identify candidates for a refinance or home equity loan.
Users can also leverage the extensive household-level demographic data we offer, as well as our HPI, to take into account factors such as changes in household status and local market conditions. This helps pinpoint potential “move-up” buyers in growing markets or “move-down” buyers, enabling a lender to focus resources on targeting the consumers most likely to transact.
On the servicing side, a client can apply the Propensity to Transact Model to its mortgage portfolio for identifying cash-out refinance or home equity prospects. The user is able to rank these candidates leveraging Black Knight Mortgage Scores, which uses numerous factors to identify customers most at risk for attrition.
Armed with this type of information, banks are able to foster the customer relationship well in advance and work to retain that customer before they look to the competition.
The speed with which users can explore multiple scenarios, see results, change parameters and then re-run whole scenarios in RAP is unparalleled and transforming the way mortgage industry professionals work with big data.
RAP also provides an affordable way for mid-sized and smaller companies to access big data and complex analytics on day one.
Using RAP, clients have a unique tool that arms them with the information needed to develop timely content and relevant offers, better focus their resources, and use sales and marketing funds more effectively. Mortgage professionals can also leverage RAP for many purposes. From risk management and portfolio research to economic modeling, benchmarking, and investor reporting, RAP supports an unlimited number of use cases.