The result is unprecedented, strategic alliances that provide enhanced revenue opportunities through actuarially sound risk-sharing structures. With customized risk management solutions, an MI partner can determine with a lender which structure or series of structures may have the greatest impact on increasing revenues and bottom-line growth. Simply put, we're talking about a paradigm shift to view your MI partner as an untapped resource. Throughout the mortgage industry, issues such as commoditization and widespread access to technology are diminishing customer loyalty and reducing the profitability inherent in originating and servicing mortgages. This paves the way for increased competition within a historically separated sector.
Consolidation is yet another issue facing lenders of all sizes.
While the largest lenders seek out new sources of volume through expanded marketing and program development efforts, small and mid-size lenders look for options with low operating costs and economies of scale. Through innovation and proper capital management, both large and small lenders can survive in this new arena. As a result of this changing landscape, lenders are looking for new opportunities to increase or maintain their margins. Other industries have mimicked traditional survival strategies such as customer retention programs, complementary consumer services and technological improvements. For years, risk management has been used as a method to responsibly manage and grow capital.