How mortgage companies can generate revenue in uncertain times

Rapidly rising courses. A stunning drop in mortgage applications. Soaring inflationary costs. Plunging stocks and layoffs make headlines for mortgage giants across the industry. The entire mortgage market is on the move like few times in history.

As the underwriting department of mortgage companies can no longer rely on new loans or the interest-based refinancing that has kept them afloat during the pandemic, the value of mortgage servicing rights serves as a lifeline.

The short-term solution? The sale of mortgage service rights for an influx of cash, which among other cuts may help mortgage companies weather what may be an extended period of volatility. Of course, for those forced to make this decision, this means that they will have to forego stable income in the not-too-distant future in hopes of a strong return on mortgage lending.

However, for both servicers and lenders with a healthy service portfolio, the changing market environment can be a time for success – to expand and strengthen non-mortgage revenue streams.

For this reason, the future of mortgage lenders today is not in mortgages at all. Rather, it is about expanding the traditional, existing service offerings – making the company fit for the market so that it aligns with the services that customers have always needed.

The simplest value that can impact your bottom line? insurance

Why insurance? First, every customer who will ever need a mortgage will also need home insurance because without it, it is impossible to get a government-backed home loan. These customers may be paying too much for insurance or may want to switch providers or coverage. While the demand for insurance is built into the mortgage process, insurance offers some important strategic advantages for mortgage lenders.

The integration is now seamless

Embedded Insurance is changing how it looks to buy insurance. Traditional insurance begins with a time-consuming “quote”—an approximate estimate that is subject to change. The sales are commission-driven and drive up the price. And it takes a lot of time and paperwork to actually purchase coverage. It’s not a great customer experience for most people.

With an embedded insurance company as a partner, the purchase of insurance is digital first. API integrations use data and automation to enable mortgage lenders to offer insurance as part of enrollment flows or existing processes and platforms that customers already use to obtain a mortgage. So for customers, adding insurance becomes a painless process. It’s a simple add-on. A simple button. One price and one click. You no longer have to leave the mortgage experience and buy insurance as an entirely separate transaction.

Mortgage lenders already have the data and confidence

A base level of trust is built with every loan serviced. Mortgage companies maintain a monthly line of communication as part of the customer relationship. While this is a natural opportunity for cross-selling products from a variety of partners, no company wants to spam or bombard their customers with unwanted offers.

Insurance does not carry the same risk. Because mortgage lenders already have inside information about what their customers are paying for insurance and how much coverage they have, it’s easy to selectively target offers to those who are making significant savings or who really benefit from additional protection.

So why haven’t more mortgage lenders successfully partnered with insurance companies?

If a mortgage company can only offer standalone home insurance, the average customer hasn’t seen enough savings to motivate them to switch. The real savings are in bundling. On average, Americans who bundle their home and auto insurance together save 16% annually — which adds up to hundreds of dollars in household savings each year.

The added layer of complexity required to bundle home and auto insurance together was only possible via the traditional insurance process, which is not designed for easy integration with mortgage lenders, although the differential savings are offset by partnership incentives or rebates alone.

But this will change.

Branch just raised $147 million in new Series C funding to accelerate its 100% digital quote-to-binding bundling experience. It’s the first insurance provider ever to instantly bundle home and auto insurance as embedded insurance – customers can combine their home and auto insurance to maximize savings, customize their coverage in real-time, and buy online in seconds.

And Branch already serves more than half of the US population and stretches from coast to coast, finally making embedded insurance a viable option for mortgage companies.

Packages are the final step in unlocking insurance revenue

When customers can find bundled insurance savings at the moment when they actually need insurance, the choice is easy. They get the coverage they’re looking for for less and a seamless experience. This is an offer that mortgage companies are uniquely positioned to offer.

For businesses that can benefit from embedded insurance packages, it means effortless loyalty, revenue and growth. The advantages are apparent:

  • Opens a new revenue pipeline

It’s more than extra income. It’s a constant, stable turnover. Branch’s bundled insurance has already brought mortgage partners 8x to 10x higher conversions compared to insurance companies that only embed home insurance.

  • Reduces maintenance costs

New revenue from bundled insurance policies helps offset the overall cost of the service.

  • Increases customer loyalty

Customers who bundle are not only happier, they’re more loyal – their bundled policies are tied to their mortgage, meaning they’re less likely to defer their mortgage and turn away from the extra savings.

Yes, we live in an uncertain, unprecedented time for the mortgage industry. But the opportunity is also unprecedented for mortgage lenders who are taking this time to evaluate the right partnerships and product offerings.

To learn more about what lenders can do to thrive in a turbulent housing market, visit

Virginia C. Taylor