Mortgage Lending CRM: Should You Build or Buy?

November 16, 2021

As average loan costs creep near $9,000, more and more lenders are looking to improve efficiencies and minimize spend wherever they can. One area to examine is the customer relationship management (CRM) system.

This piece will briefly explain how a CRM can both increase conversions and reduce overall cost per loan and then break down the relative merits of choosing an off-the-shelf option versus having a solution custom built for your organization’s needs.

Background: How a CRM Can Drive Down Cost Per Loan

Like most technology that powers today’s mortgage lenders, CRMs help drive down cost per loan in two ways: by increasing the number of leads a lender can process and by increasing the likelihood of closing each lead.

The way the CRM does this is by automating much of the work of (you guessed it) managing relationships that loan officers would otherwise have to do manually, leading to more conversions as they’re defined at every part in the funnel – dialing more leads, running more campaigns simultaneously, ensuring more people pick up the phone, etc.

An increase in contact attempts translates to more and more contacts, which, in turn translates to more meaningful conversations for a likely future customer.

In a best-case scenario, a mortgage CRM is like ensuring every LO in an organization gets to have the world’s most efficient personal assistant.

To get to that best-case scenario, though, you’ve got to choose the right CRM solution for your needs. The biggest choice you’ll have to make is whether to buy an off-the-shelf solution or have one custom built. Here’s how to think about your options.

Off-the-Shelf CRMs: Best for Big Enterprises

Existing CRMs for the mortgage lending industry (think: Salesforce’s Mortgage and Lending Cloud, Velocify, Zoho) tend to work best for enterprise lenders.

One big reason: scale. The nation’s biggest lenders know that leading CRMs have the infrastructure necessary to manage their massive lead flow.

For them, buying off-the-shelf likely means fewer headaches, even if they have to customize the solution – and they likely will. For most small and mid-sized mortgage lenders, it doesn’t make sense to pay a developer by the hour to add such capabilities in addition to paying the CRM’s licensing fee. But enterprise-sized lenders have the budget and / or staff necessary for those customizations – for example, to integrate with the lender’s telephony system and LOS.

When it comes to updating and adding new features, off-the-shelf CRMs also tend to work for enterprise lenders much better than for their small and mid-sized counterparts.

Because of their size, enterprise lenders have more pull with software vendors. When a massive client requests a new feature, CRM providers are likely to prioritize that request.

But small and mid-size lenders don’t have that kind of influence over off-the-shelf CRM providers. Their requests for new features go into the vendor’s queue; depending on how many other clients could benefit from the feature, it may or may not ever see the light of day.

Finally, bigger lenders may choose an off-the-shelf CRM because those solutions tend to come with deep support, which can be crucial when getting big, distributed teams of LOs onboarded and trained. Zoho, for example, has an online library of tutorials that let CRM users self-service as they learn the software.

Custom-Built CRMs: Best for Mid-Sized Lenders

Custom-built CRMs tend to be a better fit for mid-sized lenders because they enable the lender to include – and pay for – only the exact functionalities they want, along with integrations to the LOS, POS, telephony, and other systems the lender is already using.

A custom CRM might, for example, include scripters for LOs that take the guesswork out of interacting with new leads, whether they’re coming in from the call center or elsewhere. Custom platforms also make it possible for LOs to run highly specialized dial campaigns that make it easier to connect with the leads most likely to convert.
And then there’s the industry-specific logic custom CRMs can layer into various campaigns and automations.
For example, custom software can incorporate:

  • Logic that feeds “stale” leads – those that have been in the system for 30 days, say – to LOs during times when other lead sources aren’t as abundant. 
  • Logic that lets loan officers poach each other’s leads after three days of inactivity. 
  • Bulk and personal dialers that automate the outbound dials to a LO’s pipeline.

All of these help lenders maximize the value of each lead and its likelihood to convert while also ensuring the best-possible customer experience.

What’s more, when a small or mid-sized lender wants a new feature, they can have it added quickly to a custom solution.

If, for example, a lender identifies a new customer segment with a high propensity to transact and wants to make sure they can tag leads accordingly to optimize ROI, they’d simply have their custom development partner add that feature.

The wait time for having such a feature added to off-the-shelf software would depend on where the request entered the vendor’s queue – and whether enough of the vendor’s customers could benefit from such a feature.

More to the point, though, if a lot of their customers could benefit from having that tag and so the vendor did add it quickly, the lender that requested it may not end up enjoying the competitive edge they’d hoped for.

Bugs, Patches, and Regulatory Updates

In addition to new features, CRMs require the kinds of updates any software does: bug fixes, software patches, and so on. CRMs for mortgage lending may also need another kind of maintenance: updates to accommodate changing industry regulations.
These maintenance tasks are handled differently with custom and off-the-shelf software:

  • Off-the-shelf: Vendors push updates to customers as needed. Very little effort is required on the customers’ end – usually just clicking “update” or “download.”
  • Custom: Lenders decide whether they’d like to handle patches and bug fixes in house (which tends to work well for those who have an IT team comfortable with such work) or have their developer partner manage them.

Regulatory updates are similar, but there’s an important caveat here. While off-the-shelf CRM providers will make needed updates to their systems and push them to lenders – meaning customers have less work to do on the back end – lenders have no control over the timing of these updates.

This can be stressful. In at least one recent instance, a major vendor waited until the weekend before a regulatory update took effect to update its platform, leaving many lenders scrambling to adapt to new processes and workflows when their LOs got to work on Monday.

While lenders are responsible for updating custom software as regulations change (again, unless they work out a different agreement with their development partner), they have complete control over when new workflows and features take effect, meaning they can prepare and train their teams on a schedule that works for them.

Still Not Sure Which CRM Solution Makes Sense? Talk to Us

For more insight into which solution makes the most sense for your unique situation, get in touch. We’d love to help you figure out the path forward most likely to drive the ROI you need.

Author: Mark Hansen
About: Mark Hansen is chief product officer at NTERSOL. For more than two decades, he’s been developing digital solutions for mortgage and real estate. In his current role, Mark combines his deep industry and technical knowledge with his communication prowess to solve clients’ thorniest problems and make sure everyone involved is on the same page throughout the process.