Margins Slipping? Use Actionable Data for More Accurate, Dynamic Pricing

The mortgage landscape continues to become increasingly more competitive each day. Thanks to the convenience of online rate-shopping tools, a boost in consumer knowledge of the homebuying process, and a growing number of independent mortgage banks, it is now more difficult than ever to lock in a borrower.

What’s worse? These factors are causing profit margins to slip across the mortgage industry.

Though access to analytics and other pricing data can play an integral part in securing a borrower, traditional data sources are often too sparse or stale to provide any real competitive edge.

Enter Nomis Solutions: a holistic competitive pricing intelligence tool that combines non-anonymized market- and lender-specific data with real-time rates and actionable recommendations. The only of its kind, this comprehensive solution facilitates more advanced pricing strategies and enables leading lenders to operate more efficient and far more profitable mortgage businesses.

“There are literally thousands of mortgages quoted and priced every day; it is happening every hour, every minute,” explained Frank Rohde, CEO at Nomis Solutions. “Using advanced artificial intelligence and machine learning capabilities, we have developed a powerful tool that digests that massive repository of mortgage data and aggregates it into a single, intuitive user interface. The platform will then identify areas of price sensitivity and alert the user of opportunities to pivot operational strategies to capture additional margin and/or volume.”

The Competitive Difference

Any loan officer knows that securing a deal sometimes requires a reduction to margin. But when are those margin cuts actually necessary? Further, just how low should they go when reduced? No mortgage lender wants a race to the bottom, but those answers are oftentimes hard to determine, especially when most data sources are outdated or too vague to provide truly actionable insights.

Nomis Solutions solves that issue. With a built-in margin monitor tool, the solution offers intra-daily pricing data by lender, loan type, risk factor, geography, and more, allowing its users to identify whether they are under-or over-priced on the fly—at any time, day or night.

“The solution is a complement to an existing PPE or LOS in a lender’s mortgage technology stack. It essentially isolates exactly where the user may have an opportunity to gain more of a margin, be it five, seven, or ten basis points. Nomis clients leverage this competitive intel to lower rates or restructure as necessary to get the deal,” Rohde said.

The competitive edge continues when we explore Nomis’ deep dive into local data, as well as its insights into the consumer mindset.

As Rohde explained, the tool answers questions like: What is the competitive environment? Where is my pricing in comparison to this exact competitor? And what is the consumer’s perception of me versus everyone else?

“In order to set an appropriate or optimal price for any transaction, I need to vary my margin based on the consumer perception for that particular transaction, at that particular point in time,” Rohde said. “It’s going to be different tomorrow than it was yesterday because the competitive environment is constantly changing. It is also different for the next zip code over and for a five-year ARM versus a 30-year fixed. The combinations can be infinite, but Nomis is equipped to facilitate them all.”

A Path to New Horizons

Already a global, industry-leading pricing and profitability management solutions provider for close to two decades, Nomis Solutions entered the U.S. mortgage market just two years ago. Since entry, a number of leading lenders have already jumped on board, leveraging Nomis’ competitive insights to much success.

“Just the other day, I was able to make a quick decision and adjust my pricing to undercut my competitor’s advantage—in just five minutes,” said Isaiah Bell, an analyst with Premier Lending, Inc. “Without Nomis, you just don’t know. You are left to wonder what the competition is doing, but you cannot be 100% sure. You’re guessing.”

For mortgage lenders entering new markets, Nomis can help them gain steam in these areas far more aggressively than their competitors, as well as help them manage new opportunities and adjust pricing strategies as they scale to ensure they don’t leave money on the table in the process.

“We use Nomis to look specifically at top performers in the areas where we want market share,” Bell said. “We want to be comparable and competitive because competition is certainly stiff in our chosen markets.”

Leveling the Playing Field

At the end of the day, the right data has the power to level the competitive playing field—at the loan level, at the market level, and among lenders large and small.

Though many fintech solutions offer a selection of this necessary data, no others deliver the non-anonymized big picture needed to fully understand the exact market for a particular transaction, nor power a truly aggressive pricing strategy that prioritizes margins and a competitive edge from the very beginning.

“With Nomis, we have actionable insight into how our direct competitors are adjusting their

pricing for the day,” Bell concluded. “After taking note of competing lenders’ activity and sharing that data with our head of secondary, we can now easily adjust pricing day to day, or even intra-daily. As a result, our pricing and overall strategies have become far more granular and refined.”

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