From all aspects of the industry, convention attendees assess the situation
Representatives from the mortgage industry attending a recent conference took time out to speak to Mortgage Professional America to assess the state of their industry against a backdrop of higher rates and inflation.
The insights came from representatives from each aspect of the industry – prime/conventional; reverse mortgages; appraisals; commercial/investor; and non-QM. In the first category, Austin Niemiec of Rocket Pro TPO previously told MPA he envisioned bolstered markets ahead. He and the others attended the National Association of Mortgage Brokers conference that took place Oct. 7-10 in Las Vegas.
“What I’ve been telling brokers is this: I don’t care if rates go up to 9%, or all the way down to 2%. Conventional Fannie, Freddie or Ginnie, FHA – it’s still going to be 90% of the market,” he said. “We’re rolling out some non-QM to help create a little more diversity and excitement. But Fannie, Freddie, FHA, VA – no matter how you look at it is still going to be 90% of the market. So, continue to get good at that, continue to build relationships with agents. We’re going to see record-setting purchase years in ‘23 and record-setting purchase years in ‘24. There’s still a lot of business to go get.”
Read more: Have no fear – bolstered markets are coming
Other attendees offered unique insights as well:
Ralph E. Rosynek, Jr., senior vice president and CIO of Moneyhouse Mortgage, offered thoughts from the reverse side. While other aspects of the business have slowed (take refi, for example), the reverse mortgage side of the business is booming, he suggested: “The seniors are coming out in much greater numbers all over the country because the reverse side is still a way for them to be financially independent as well as cover the cost of the pandemic which really eroded their funds and their savings over the year. So we’re continuing to experience a very high number of originations, and we expect that to continue for the next 12 to 18 months. We’re very positive versus some of the other segments of the market which have really dried up, so to speak.”
Mark Ayton, senior vice president, business strategy at AXIS Appraisal Management Solutions, was similarly bullish on the appraisal side of the industry: “Certainly, a lot of the volume, especially on the refinance side, has dried up and completely dried away. What that has created though is opportunity, especially on the service side for purchase and for equity capture through refinances - at least through home equity products. The good news – if there is some to come out of this – is that our portion of the business has gotten a lot better. We’ve seen appraisers drastically reduce turn times, being better about coming in at the cost they quote. Moreover, the quality of the appraisals coming in, being able to be a turnkey to lenders. As the GSEs have started to become more interested in how to streamline the process, you’re seeing some more creative appraisal products – appraisal waivers altogether, desktops that are just property inspections – and that has allowed a much better turn time and much lower cost as well.”
Erica LaCentra, chief marketing officer at RCN Capital, spoke on the commercial/investor side of the industry: “Especially with what’s going on in the residential side, we’ve seen a really large increase in interest from brokers just to be able to diversify their product offerings, which has been really good. Also, just with the rate increased, our space is a little bit insulated from that. We have had to increase our rates in conjunction to what’s going on in the residential side, but we’re actually at a point where our rates are very stable now, which is really great. I would say around July and August, people were holding off on making transactions. Volume was definitely shifting more toward short term loans at that point in time, but now with prices starting to stabilize we’re seeing a massive influx in investor interest on our 30-year product.”
Greg Armstrong, COO at LoanStream, also offered a rosy outlook for the non-QM space. “When rates are good, when they’re low, everyone does well. When rates go higher, non-QM does very well. That’s basically because there are more people willing to work with brokers because it’s a little tougher for them to gain access to capital. The general state of the market is a little up and down right now. Any time an economy expands or shrinks, you’re going to see winners and losers. And it’s not so much the fact the rates are going up that’s only driving this. What’s happening here is people who have good business models are doing well and people who have maybe been cutting some corners or having a little different time in moving their paper around are either going away or having a tougher time. So, it really comes down to operating your business well and that’s why you’re seeing certain non-QM lenders do very well at this point in time.”