TheMReport — News and strategies for the evolving mortgage marketplace.
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14 | M R EP O RT FEATURE A mid the economic havoc created during the corona- virus pandemic, the residential mortgage industry emerged as one of the relatively few bright spots in an otherwise dismal environment. That is not to say the industry didn't face its share of challenges—rapidly changing federal regulations, the impact of social distancing protocols on a traditionally person-to-person business, and the abrupt migration from offices to working from home were among the most pressing obstacles that the industry faced and, for the most, successfully overcame. If 2020 was the most unusual year for the origination space, what does 2021 hold? Can we expect a continuation of last year's difficulties or is a rollback to pre-pandemic normalcy on the horizon? And what new trends will dominate how the industry operates? Industry leaders queried on what the near-future holds are forecasting both tests and trials that need to be addressed, along with new opportunities that could emerge when the tumult has finally subsided. But if there is one theme that is consistent across the origination space, it is the sense of optimism that 2021 will be a good year for the industry. "I think the main trend is going to be a very, very strong mortgage and housing year across the board," predicted Mat Ishbia, President and CEO at United Wholesale Mortgage in Pontiac, Michigan. "Rates are very low, the economy is recovering, and will recover. Housing demand is great, millennials are buying, mortgage brokers are growing their business channel, and the education of consumers is hap- pening. I think 2021 is going to be one of the best years in history from a mortgage perspective." Matt Weaver, VP at Cross Country Mortgage in Boca Raton, Florida, is predicting "a very strong purchase market in 2021," although he observed that low inventory will fuel more bidding wars among buyers. "The purchase markets in most major markets are what we call a heavy multiple offer environ- ment," he said. "There is low housing inventory across most major markets and high buyer demand. It's causing a lot of frustration with buyers that are seeking to purchase. Originator really need to step up their game in terms of speed and execution in order to compete and win in these multiple offers." Weaver added that originators need to focus on "winning the confidence of the listing agent and the seller, being able to react and deliver loan commitments or loan approvals very quickly and having a strong reputation and credibility about your pre-approv- al process. It's all about reducing risk to a seller and to their listing agent. We're going to be in this heavy multiple offer environment for a minimum of the first two quarters of 2021." Matt Hydrew, VP of Sales at CreditXpert Inc. in Baltimore, is expecting a continued push in refinancing for the course of this year. "With the drop in rates, I think borrowers are still going to push for refinances," he said. "While there's been some talk that the refi market is going to slow down and the purchase market will begin to take over by the end of the year, I don't know if that's necessarily going to happen." "According to some stats, there is quite a bit of equity out there," said Ron Haynie, Senior Vice President of Mortgage Finance Policy at the Independent Community Bankers of America. "There's still a fair number of homeowners who haven't refi- nanced or may have refinanced a couple of years ago and now they're in the money. I'm one of them—we refinanced a couple What Trends Will Shape the Origination Space? The mortgage market is being sculpted by a series of trends including challenges, high-tech solutions, and a shortage of underwriters. By Phil Hall