Well, we are still in the middle of uncertainty and unprecedented unemployment (over 40 million unemployment claims), economic contraction (the economy by some estimates has contracted 5%+), and many parts of the country still in complete or partial shut-down.  So, what’s the good news?  I am glad you asked.

Let’s start with the mortgage industry.  Rates are at a 50-year low, hitting 3.15% on a 30 year note as of this week.  Don’t adjust your glasses, yes, 3.15%…and that is not a teaser rate.  We are seeing mortgage companies come roaring back into direct marketing channels to strike while the iron is hot.  Cash-outs are out, for now.  Rate and term refinances are back, baby!  Homeowners are refinancing in droves.  In our research, we are seeing refinance applications continuing to rise.  Don’t ignore purchases though.  While there has been a drop-off in purchase application activity, depending on the area of the country you are in, new purchases are just slightly 5 to 10% off from last year’s average.

For mortgage retention, if you have a portfolio, you must monitor that portfolio across all 3 credit bureaus with daily triggers.  And, set-up an email, phone or direct mail campaign to reach out to your customers who are applying for mortgages elsewhere.

What about personal lending?  Naturally, with the Feds giving stimulus money as well as a $600 per week unemployment benefit, the need for cash has diminished.  There was a slowdown in personal lending in April and May, but application activity has still been solid.  We are recommending a more conservative approach to marketing by targeting only the top deciles of our models, but certainly stay in the market because there is still a need.  You can really be conservative and simply target individuals who have completed new applications too.

There is still a bit of concern on the risk side of not knowing who is out-of-work, so recent paystubs are imperative.

 That’s all for this week. Stay safe!