TheMReport

MReport Jan 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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22 | TH E M R EP O RT FEATURE technology will move forward, too, such as blockchain driving increased efficiencies in title and servicing, and artificial intel- ligence in everything from ad placement to lead identification. It's a more risky prediction to make, but 2019 may be the year we see more adoption of e-sig- natures. This added point-of-sale convenience for consumers could change the industry. Consider that online remote eNotarization is legal in four states and that num- ber will grow in 2019. This means (even though we have been saying this for several years) eMortgages may reach a tipping point in 2019. This has been a long time com- ing in an industry that is heavily regulated. But consumer demand, investor receptivity, and advances in technology may finally drive this to be a reality. At the same time advancements in technology have made us less likely to need to actually speak to customers, 2019 will also be the year lenders remember that cus- tomers still want to have conversa- tions. This is why it is important to "show them some personalized attention during certain parts of the origination process" through phone calls. Speaking to customers and answering questions directly can go a long way in improving the borrower experience. Portfolio Retention C ash out refinancing will grow because more consumers have equity they can tap for remodels, to pay bills, or for large purchases. Lenders that have analytical ca- pability and the dataset to predict the behavior of specific segments of their portfolio will have the best shot at retaining their existing customers and providing borrow- ers what they need. These efforts mean more servicers will look to technology, such as analytics systems and customer relationship management systems, to help in that process. Servicing Sales of mortgage servicing will continue to increase as consolida- tion accelerates among mortgage servicers. With gain-on-sale mar- gins reflecting less cash and more mortgage servicing rights (MSR) value, servicers will sell to boost liquidity. Any price impact from those increased sales will likely be offset by demand as larger aggrega- tors using MSR purchases to offset their reduced origination volumes. No matter what happens in these and other areas of the industry, the smartest way to grow during a changing market is to run a diversified business model. Adopting a multichannel platform gives mortgage bankers diversified revenue sources that provide the best possible hedge against market changes. For us, that's servic- ing, retention, distributed retail, correspondent, commercial and renovation lending. Whatever strategy you choose, you must manage the business carefully and deliberately because there is a lot of this cycle left to go. The challenges of rising rates, falling home sales, and global uncertainty will continue not just into 2019, but well beyond. MICHAEL DUBECK is president and CEO of Planet Financial Group, a financial services firm headquartered in Meriden, Connecticut, and the parent company of Planet Home Lending, LLC. Dubeck started his career in the mortgage industry with First Boston Corp. as a trader on the mortgage desk. Since then he has worked successfully at Morgan Stanley, its Saxon subsidiary and Hudson Advisors/ LoneStar Funds. 2019 may be the year we see more adoption of e-signatures. This added point-of-sale convenience for consumers could change the industry. Consider that online remote eNotarization is legal in four states and that number will grow in 2019. This means (even though we have been saying this for several years) eMortgages may reach a tipping point in 2019. NEW YEAR'S ISSUE

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