Loan officer explains his approach to capturing short-term volume and building long-term sustainability
‘The refi boom is over!,‘ analysts declare.
‘There are 19 million uncaptured refis out there,’ other experts cry in return.
This may be par for the course after a refi boom year, but wide gulfs of opinion exist between those who believe the refinance pipelines that made mortgage pros rich in 2020 will keep flowing through 2021, and those who see a looming end and sudden scarcity in the refi market. While these debates rage on the pages of MPA, originators on the front lines are deciding how much to focus on refis through 2021.
Sean Grapevine (pictured), owner and loan officer at ATL Mortgage in Atlanta, is enjoying the fruits of the refi boom without chasing after extra refi business. By the end of 2020 he didn’t see the refi boom tailing off and was still enjoying the significant income boost it had brought. Because of the relative ease and historic volume of refis, though, he has focused more of his marketing efforts on the purchase side, using the benefits of a refi boom to prepare for its end.
“We’ve seen refis continue to be strong,” Grapevine said. “We don’t do much marketing for refis. We just get a lot of referrals from people who are mid process and hear from someone else that we just got a 2.5% interest rate…We’re not even soliciting them.”
While Grapevine said he could dip into his pool of plus 3.5% past clients, the sheer volume of unsolicited business he’s dealt with since lenders opened their doors again in 2020 meant he’s barely had to use that pipeline.
Grapevine, too, believes that “there’s no rush on refis,” after the Fed’s recent recommitment to maintain an extremely low-rate environment into 2021. In that context, Grapevine isn’t chasing down refi business. That chase, in his view, is a waste of energy.
Once rates do rise, Grapevine seems comfortable to wash his hands of the refi pipeline and get back to his purchase business. The boom in 2020, he said, has helped raise the profile of ATL mortgage and a rising rate environment reflects a stronger underlying economy which, in turn, produces a strong purchase market. Grapevine isn’t worried about what happens to his business when the refi boom ends.
One thing he’s done to improve the purchase pipeline is deepen relationships with real estate agents. Because so many LOs have been swamped by refis, Grapevine has seen a number of real estate agents struggling to find available mortgage pros. By being there for those agents, Grapevine believes he’s secured more purchase business for a post-boom market.
Even if the refi boom continues well into 2020, Grapevine doesn’t think mortgage pros need to go seeking out refi business. His advice is to let that business come to you while you work on the pipelines that will sustain your business no matter the rate environment.
“Chasing refis is the thing that kills people,” Grapevine said. “Don’t chase refis. Those will come. Chase purchases so that you have a pipeline set up. Stop leveraging refis right now because if you can’t get refis in at 2.5% interest rates with no origination fee, you’ve got no business thinking you can do this.”