He shares his perspective on success in an ever-changing mortgage industry landscape
The mortgage industry has faced significant challenges in recent years, demanding resilience and adaptability from professionals across the board.
Amid these turbulent times, some mortgage brokers have managed to stay afloat and others have even thrived. Jeremy Engle (pictured), a seasoned loan officer at Vero Mortgage, sheds light on the key factors contributing to his success in originating mortgages during these trying times.
Retaining talent and navigating market gridlock
Engle acknowledged the difficulties he encountered, particularly in making tough decisions regarding personnel. Having always been focused on growth throughout his career, he found it challenging to let go of employees during the pandemic.
“I think the hardest part for me was I’ve always been in growth mode my whole career, so I’ve never really had to lay people off, and I probably hung on to people a little longer than I should have just because I guess I had too big of a heart,” he said. This experience taught him the importance of making tough decisions for long-term stability and growth.
Read more: US jobs growth smaller than expected in June
The top originator also noted the current market gridlock caused by high-interest rates. He highlighted the financial implications of homeowners trying to upgrade to larger properties with higher interest rates. The significant increase in monthly payments often makes it financially impractical.
Engle explained: “You’re going to jump to double, sometimes triple your interest rate. It doesn’t make financial sense.” This scenario has resulted in a stagnation of the housing market, with homeowners opting to postpone moving or upgrading.
Pros and cons of non-QM
“I do non-QM when it makes sense,” said Engle, who mainly underwrites FHA, VA, conventional loans, and some jumbo. “Non-QM’s great, but the hardest part right now is the rates are pretty high. So, you take a normal borrower that might be getting 6.5%, and you throw them in non-QM, and now it’s 7.5% to 8.5%, even nine sometimes, depending on the credit score.”
While acknowledging the challenges posed by higher rates, he explained that non-QM mortgages can still be viable options for borrowers who have the necessary funds.
“We have some pretty cool products that, as long as they have some money, we’re doing some of them,” Engle said. However, he recognized the difficulty in finding properties with cap rates higher than 9% in the current market, leading to careful consideration of investment decisions.
What’s ahead
Engle anticipates the coming year will continue to present challenges for mortgage brokers. He emphasized the necessity of hunkering down until interest rates decrease, as lower rates could break the market gridlock.
“That’s the only thing, in my opinion, that’s gonna change it at this point - because if you have a 3% interest rate and you’re going to sell your house to go buy that house that has another garage or another bedroom, what you’re going to do is jump to double, sometimes triple your interest rate,” Engle said. “It doesn’t make financial sense.”
Read next: Meeting the needs of investor clients in the mortgage industry
He predicts that a possible recession and adjustments in long-term bonds could pave the way for renewed growth. However, Engle acknowledged the current uncertainty and the difficulties in planning for the future due to extensive government control in the industry.
“Don’t mean to get political or anything, but I believe that rates will have to come back down, and that might not mean short-term rates as much as our long-term bonds,” said Engle.
While the industry may continue to face hurdles in the near future, Engle is prepared to seize opportunities and navigate through these dynamic times.
“I still do quite a bit of refinance, and I’m talking to some clients about a couple of refis soon,” he shared. “So that’ll be nice. We’ll make up for some of the losses.”
Want to keep up with the latest mortgage news? Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
