"The whole market can shift on a dime"

New VP on the importance of adapting to change

"The whole market can shift on a dime"

As 2021 draws to a close, no-one should be blamed for feeling a tad jaded. It’s now that brokers, consciously or otherwise, take stock of what has been a long, drawn-out year emerging from the effects of the COVID pandemic, even if the industry unexpectedly benefited from the subsequent fall out.

With concerns that interest rate rises have stymied refinance loan volume (next year refinance originations are expected to drop by 62%, according to the Mortgage Bankers Association) and fears about the possible economic impact of a new COVID variant, it’s no wonder that some wish to take a breather before bouncing back with renewed vigor in January.

Despite this, one mortgage industry veteran, Tim Fisher (pictured), noted how one product sent tongues wagging in the broker community at the recent National Mortgage Bankers convention in San Diego.

“I flew in on a Sunday and then immediately started having customer meetings that Monday, and the amount of optimism and excitement about the opportunity in non-QM was pretty remarkable,” he said.

Read more: Deephaven Mortgage welcomes industry veteran as new VP for business development

Fisher’s trip to the convention was effectively his first day on the job as the new vice president of business development for non-QM lender, Deephaven (it was his long management experience, mentoring and building relationships with mortgage bankers, that drew the attention of the Charlotte-based firm’s CEO, John Keratsis).

Fisher hit the ground running at the convention and quickly drew some important conclusions about non-QM in his first meetings.

“I thought they were going to be much more about educating and really trying to convince companies that they needed to think about non-QM, but many of them had already completely bought into the fact that non-QM was going to be a big part of their business,” he said.

“I remember one customer in particular, who is probably doing $1 million to $2 million a month right now, saying he wanted to be doing $50 million a month in non-QM by the end of 2022,” he added.

Market forecasts appear to back the upbeat mood. After rebounding from a poor 2020, non-QM’s growth has been relentless in 2021 and is expected to reach $25 billion by the end of the year, according to market analyst S&P Global.

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Dallas-based Fisher will be in charge of correspondent third party origination business in Texas, among other areas, meaning he should be ideally placed to exploit the tech start-up boom sweeping across the Lone Star state and engage with its many self-employed entrepreneurs, many of whom will come knocking on the door for non-QM loans.

Fisher agreed. “Absolutely. That trend of increased self-employment bodes really well for the non-QM market and bank statement programs, which are really tailored towards self-employed borrowers.”

He said the trend effectively started with the working from home rule in response to COVID, which sparked a big increase in the number of new, small businesses.

According to a pre-pandemic projection from the US Bureau of Labor Statistics, the number of self-employed people was set to increase to 10.3 million by 2026, but more recent data from the Pew Research Center placed the number of self-employed workers actively at work much higher at 14.9 million for the second quarter of 2021.

In any case, with brokers aware that refi volume is tapering off amid the albeit small rise in rates, interest in the non-QM space can only grow.

“I think a lot of people were expecting rates to be a little bit higher as we approach the end of the year, but you can only refinance borrowers so many times,” Fisher said in a nod to the mortgage industry’s cyclical nature.

“The biggest challenge I think I’ve faced is just the huge swings and the huge ebbs and flows of the market where you can go from record breaking volume one year and then have a tick up in interest rates - the whole market can shift on a dime; it’s an industry that’s ever changing.

“But that’s also one of the really great things about it - new challenges and new opportunities.”

His decision to leave the comfort of mortgage insurance firm Arch MI, where he spent almost three years, and take a qualified risk with a growing company like Deephaven, would suggest Fisher is not averse to change.

“Deephaven is much more in a growth and building mode, whereas the mortgage insurance industry is fully banked, but that is one of the things that attracted me to the company.

“I enjoy (the idea of) growing and building and helping a company strive for that next level. The other thing was to be in more of a customer facing role - I really missed that interaction, so my responsibility here is to go out and continue to develop partnerships with the external customer; the mortgage originator,” he added.

Fisher said he drew inspiration from his volunteer work at Promise House, an NGO dedicated to providing shelter for homeless youth, where he sits as a board member.

“I feel very strongly about the issue of youth homelessness. It’s difficult, but I found it to be very inspirational. These kids are very, very resilient and remain remarkably optimistic about the future, even though they’re going through this very difficult time,” he said.

For a mortgage professional whose job remit includes mentoring staff, it’s perhaps not a bad way to start a pep talk for jaded originators, especially in the run up to the Yuletide season.