Originators – don't panic

'A lot of originators are feeling the pinch. They're scared, they're nervous.'

Originators – don't panic

It’s impossible to peer into the future with great clarity absent the proverbial crystal ball, but one thing is for sure: The months ahead will be tough – particularly for mortgage originators – amid a changing economic landscape and the rise of technology threatening to replace them altogether.

But don’t panic. Jamie Cavanaugh, chief operating officer and partner at Amerifund Home Loans Inc., said it’s not too late to achieve consistency – a virtue she intimated was something of a lifesaver cast into choppy waters.

“It’s all about consistency,” she said in a recent interview with Mortgage Professional America. “One thing I’ve learned after a couple of decades and a few of these cycles that we’ve been through is this: It’s never too late to start being consistent with your business, which means getting in front and staying in front of not just your clients, but also your referral partners like your real estate agents.”

MPA interviewed Cavanaugh during the inaugural “Hall of AIME” event staged by the Association of Independent Mortgage Brokers from Feb. 10-12. Amid a mercurial mortgage backdrop, the event was meant as a celebration of industry elites.

Read more: Originators – going the way of the dodo?

“Get out there and start offering educational opportunities for your referral partners,” Cavanaugh said. “Help them learn and grow more – they will thank you for it. Consistency for me is having newsletters, phone calls, emails, texts, checking in with your database and referral partners on a regular basis so when the time does come, they remember you.”

Which is not to say anxiety isn’t there. It is, and it abounds.

“It’s hard,” Cavanaugh acknowledged. “A lot of originators are feeling the pinch – they’re scared, they’re nervous. At the end of the day, yes, it’s going to be a more challenging year.”

Yet interest rates are still pretty low, and will remain so from a historic standpoint. And while the refinancing boom has eased, homeowners will still have the need to refinance their homes, she added. Higher interest rates have curbed the equity-pulling explosion, but the need for such cash outlays will continue despite rising rates, she said.

“But people are still buying homes,” she said. “The supply and demand issue is still a massive challenge for everybody. People will always buy homes, and people will always refinance as well. They’ll refinance to do things like pulling equity out to buy investment property, consolidate debt. Because at the end of the day even with rates being a little bit higher from where they were, they’re still amazing.”

Read next: Get ready for a huge mortgage rate hike next month

Sans that crystal ball, Cavanaugh prefers to focus on the past for guidance: “When you look at the historical chart – like a 20- or 30-year lookback – it’s cheap money. You can’t borrow money as cheap as you can with a mortgage anywhere else.”

Still, some people believe loan officers and brokers will eventually be relegated to the dustbin of history. In nearly primal defense, the mortgage industry metamorphosed as the COVID-19 virus spread – with software platforms fast-tracked in response to lockdown rules just as vaccinations were developed at astonishingly rapid rates to mitigate the scourge. What emerged was digitization of the mortgage process, enabling virtual originators to engage with clients from the comfort of home.

In a recent interview with MPA, Nexval CEO Souren Sarkar presaged what he views as eventual obsolescence of loan officers given a growing consumer penchant for ease of process. Sarkar likened technological usurpers of the tradition LO as something akin to abundant driverless cars also racing toward the near future.

“The loan officer function is probably something I wouldn’t advise my children to aspire to for a career,” he said.


Cavanaugh takes a decidedly different view, suggesting this year will be one separating the mortgage wheat from the chaff under the winnowing fork of spiked interest rates.

“For some of us who have perspective, it’s a natural cycle,” Cavanaugh said of interest rate spikes. “We’re in a cycle that is really in a lot of ways going to show us who is working their business and who has been working their business this entire time and who is going to have to really grind it out and work extra hard to just try to stay afloat now. Here’s what I’d say: If you can make it through this, you can make it through anything.”