Lenders can't rest on their laurels for very long after originating a mortgage these days. Homeowners who want to refinance begin shopping around at the drop of a hat - or an interest rate.
So lenders are focusing on how to encourage their borrowers not to jump ship.
"In today's environment, there's very little loyalty to the company that originated your mortgage," said Anne Morgan Moore, president of Atlanta- based Synergistics Inc. "The most important thing for homeowners is what's easiest and the best deal for them."
Lenders who hold large servicing portfolios are particularly vulnerable.
"When you're talking about a small-town bank, where you know the owner, there's some loyalty there" Ms. Moore said. "But how many people have that relationship with their lender?"
Lenders are secretive about how well they do at retaining customers who refinance, but the issue is widely considered important. Many lenders have recently committed additional energy to refi strategies, to keep up with demand - and ahead of the competition.
"We try to make it as convenient as possible to refinance, by offering a variety of means to access us," said Greg Quick, senior vice president at Comerica Mortgage Corp., Auburn Hills, Mich.
Comerica provides such options as a telephone line for refinancings, mortgage professionals that make house calls, and in branch specialists.
The company also uses statement inserts, general media advertising, counseling at housing fairs and trade shows, and direct mail to locate refinance customers.
Refinancing has been an key aspect of the companies' origination strategies, Mr. Quick said. Comerica is even pulling employees from nonmortgage divisions and reassigning responsibilities within the mortgage division to take care of the additional volume.
The mortgage division of Central Carolina Bank, Durham, N.C., is working with the bank's marketing department to develop a strategy for getting additional refinancing customers, and keeping the home loans they do have.
Central Carolina already offers a streamlined refinancing program that allows borrowers to get a new rate within five to 10 business days. Traditionally, refinancing can take more than a month.
Despite the popularity of the streamlined program, value is still the main emphasis for the bank.
"Most of the consumers we work with are fairly savvy," said Helen Moore, senior vice president at Central Carolina. The company has had a significant number of phone callers checking rates, she said.
Local papers often run weekly refinancing rate comparisons that are closely studied by homeowners, Ms. Moore said. And often, many will check their original lender first, as a benchmark.