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STRATMOR Executive Speaks at the 41st CMLA Convention

Published: October 15, 2014

PEACHTREE CITY, Ga.—September 2, 2014—Citing a growing disconnect in how members of the Millennial Generationyoung adults born after 1980envision managing their personal finances and what is offered by the banking industry, Garth Graham, Managing Director at the STRATMOR Group, told attendees at the 41st Annual CMLA Convention to be dissatisfied with just producing compliant loans.

“Lenders need to cultivate a customer service environment and embrace transparency, social media, Big Data and, above all, the changing psychographic makeup of their customers,” he said. “Most Millennials88% of themdo their banking online and half of those use their smart phones to do so1, which isn’t surprising. What is surprising, terrifying if you’re a banker, is that 71% told researchers they would rather go to the dentist than listen to what banks are saying.”2

Graham emphasized his message that banks need to disrupt the status quo by citing statistics published recently by Pew Research, Brookings Institute, and Joint Center for Housing Studies. 

●      By 2020, Millennials will comprise more than one of three adult Americans; by 2025 they can make up as much as 75 percent of the workforce3;

●      Only 19 percent of Millennials agreed that “most people can be trusted,” half of all other older generations4;

●      About two-thirds of the Millennials agreed that “businesses make too much profit,” which was the highest level of agreement among all generations5;

●      Millennials keep more of their assets in cash, less in stocks; the average Millennial investor has 52 percent of their savings in cash, compared to 23 percent for other age groups6;

●      70 percent of Millennials thought that the way to pay for things five years from now will be totally different and one-third said they didn’t believe that they would need a bank at all in the future7.

“These and others in a growing body of statistics make it clear that the mortgage lending business model is morphing into something new and relevancy-challenging to traditional mortgage banks,” Graham said. “Consider that three-fourths of Millennials (73%) say they’d be more excited about a new offering in financial services from Google, Amazon, Apple, Paypal or Square than from a nationwide bank8. What a vastly different delivery system for financial services than what we have today. This is why it’s so vitally important to not only talk about, but act on, the needs, wants, and desires of our customers. Which means, of course, satisfying Millennials.”

The 41st Annual CMLA Convention, held this year in Vail, CO, was attended by residential and commercial mortgage industry leaders, individual mortgage loan originators, mortgage brokers, third party service providers, regulators, and others involved in mortgage banking. 

According to Erik Anderson, President of the Board of Directors of the CMLA, the generation gap between today’s loan officers, most of whom are Baby Boomers around 52 years of age, and younger homebuyers is alarming. It’s driving many lenders to hire Millennials. By partnering more mature LOs with Millennials, lenders are building teams that mesh experience with youthful energy and technological savvy.

“The CMLA is focused on ‘The Next Generation’ of home buyers, employees and lending advancements as we help our members continue to adapt to market changes while engaging in more housing-related community initiatives,’ Anderson said.