What should lenders do to find new business opportunities in today's market and maintain high mortgage volume?
If the Mortgage Bankers Association’s forecast is realized and the industry originates nearly $2.5 trillion in new loans this year, it will be one of the best years in the history of the business. But that’s not what many lenders are thinking now, as they watch volume tumble from its $4+ trillion peak in 2021.
The writing was on the wall as early as this February that volumes were falling and by April sources were saying that refinance volume had all but dried up. Most lenders began executing their pivots to the purchase money market in time for the spring home buying season. Any lender who wasn’t thinking about moving away from refi workflows by June was probably already too late.
As we approach the end of summer, we find the majority of loans moving through our mortgage loan origination platform to be purchase money loans, but that’s not all we’re seeing.
Streamlined workflows aimed at financing new home buyers supported by next generation technology is proving to be a perfect prescription for many lenders. But leading lenders are looking beyond purchase money mortgages to other lines of business.
One place they are looking is into their past customer databases for new loans, home equity loans or lines of credit, or new loans to purchase investment properties.
While everyone is reaching out to real estate agents for new purchase money loans, smart lenders are also having conversations with other business referral partners.
Wealth management professionals, for instance, are having some interesting conversations with their clients right now, some of whom are calling upon mortgage lenders for additional information.
Even with rising rates, mortgage money is some of the cheapest capital available. It turns out that some advisors are suggesting that wealthy homeowners pull money out of their homes in the form of a cash-out refinance and invest it where they can get a higher return.
There is business to be found in today’s market, lenders just have to look in new places. When they find it, we’ll have the technology to help them originate it, efficiently and affordably.
By Joe Camerieri, EVP, Sales & Strategy at Mortgage Cadence
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