Borrower Drift: The Silent Revenue Killer Lurking in Your Pipeline
When you think about revenue loss, you might be focusing on marketing costs, operational inefficiencies, or competition in the market. But there’s a less obvious yet highly damaging problem draining millions from your bottom line: borrower drift.
What is Borrower Drift?
Borrower drift refers to the gradual disconnection between approved borrowers and their originating lender before they reach the closing table. While the borrower might have received an initial loan approval, something causes them to drift away—whether it’s frustration with unclear numbers, delays, or being lured by competitor promises. This drift ultimately results in lost deals and a major blow to lender revenue.
The Hard-Hitting Numbers
-
The nationwide mortgage banker had $2.43 billion in unclosed loans from approved buyers.
-
Assuming an average margin of 2%, that’s $48.6 million in unrealized income.
To put this in perspective, a recent analysis revealed that the highest-volume lender in the nation had a staggering 91% borrower drift rate. Even more telling is what we discovered internally when analyzing a nationwide mortgage banker with almost 300 branches—a 57% approval-to-close ratio. In other words, 43% of approved buyers didn’t make it to closing.
Let’s break down what that actually means:
This isn’t just an outlier. The industry average closing ratio for lenders typically hovers between 40% and 60%, meaning that borrower drift is a systemic issue affecting nearly every lender in the business.
Why Does Borrower Drift Happen?
-
Inaccurate or outdated payment estimates: Many borrowers shop around after they encounter unexpected payment or cash-to-close discrepancies.
-
Slow response times: Borrowers often make buying decisions on evenings or weekends when loan officers may not be readily available.
-
Third-party payment calculators and competitor ads: Popular real estate search platforms, like Zillow, feature built-in mortgage calculators that expose borrowers to competing lenders, luring them away with "better" deals.
To put this in perspective, a recent analysis revealed that the highest-volume lender in the nation had a staggering 91% borrower drift rate. Even more telling is what we discovered internally when analyzing a nationwide mortgage banker with almost 300 branches—a 57% approval-to-close ratio. In other words, 43% of approved buyers didn’t make it to closing.
Let’s break down what that actually means:
The Padzilly Solution: Locking in Borrowers, Locking in Revenue
-
Accurate, Real-Time Loan-Based Numbers: Padzilly uses actual lender-provided approval parameters to give borrowers precise payment and cash-to-close estimates. No more surprises that push buyers to shop elsewhere.
-
Buyer Engagement on Evenings and Weekends: Borrowers don’t stop house hunting after 5 PM, and neither does Padzilly. With 24/7 loan parameter updates and offer calculations, borrowers always have answers to their questions, reducing their temptation to seek alternatives.
-
Integrated Offer Letters: Our property-specific offer letters, customizable for your company, ensure that buyers know exactly what they can afford and present stronger offers to sellers. These letters align perfectly with their loan approval, reinforcing confidence in their financing.
-
Elimination of Competing Payment Calculators: Borrowers stay within the Padzilly ecosystem, where they receive the most accurate and personalized information. This eliminates their need to use third-party calculators, which often expose them to competitor advertisements.
-
Elimination of Competing Payment Calculators: Borrowers stay within the Padzilly ecosystem, where they receive the most accurate and personalized information. This eliminates their need to use third-party calculators, which often expose them to competitor advertisements.
Padzilly was designed to tackle borrower drift head-on by keeping borrowers engaged, informed, and confident in their original loan approval. Here’s how we help increase your approval-to-close ratio and reduce borrower drift:
The Financial Impact of Closing the Gap
Even if Padzilly helps recover just 30% of the lost revenue from borrower drift, the value proposition is clear:
For the nationwide mortgage banker, recovering 30% of their $48.6 million in lost income would mean $14.6 million in additional revenue.
For any lender processing $1 billion in annual loan approvals, improving their closing ratio by just 10% could add millions in revenue.
A High-Value, Low-Cost Solution
One closed deal from a retained borrower can cover nearly two years of Padzilly’s subscription cost. Padzilly isn’t just a tool—it’s an investment that pays for itself many times over by securing your borrowers and streamlining the entire homebuying process.
Give Your Loan Officers More Time to Pursue Business
Padzilly doesn’t just reduce borrower drift—it also frees up your loan officers from the time-consuming work of recalculating payments and prepping offer letters during weekends or evenings. This gives them more time to focus on what matters most: pursuing new business, building relationships, and growing your pipeline. Think of Padzilly as a team of high-level loan officer assistants, available 24/7, at a fraction of the cost.
The Bottom Line: Control Means Revenue
The key to stopping borrower drift is control. By keeping borrowers engaged with accurate loan information and preventing them from seeking answers elsewhere, Padzilly helps you retain more deals and significantly increase your bottom line.
Don’t let borrower drift drain millions from your pipeline. Try Padzilly today and take control of your closings.
Download the Padzilly mobile app. from the
Google Play or AppStore
© 2024 Padzilly. All Rights Reserved.