TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/134983
the latest or ig i nat ion ORIGINATION Originators Worried over Regulations, Shift in Market se r v ic i ng Change continues to trigger anxiety for origination space. W S e c on da r y M a r k e t a na ly t ic s hile rising interest rates and the challenges that come with a purchase-dominated market represent concerns for loan originators in 2013, the vast majority are most worried about the next phase of regulations being implemented, according to an annual survey released by Hammerhouse LLC. For the survey—the third of its kind—Hammerhouse asked more than 350 originators for their opinions on critical issues facing the mortgage industry. Out of those surveyed, about 81 percent have been in the origination business for more than a decade—a red flag in its own right, says managing director Drew Waterhouse. "The sheer size of the mortgage originator responders with more than 10 years of experience suggests a need for lenders to seek younger origination talent by developing talent in-house or through recruitment from outside," Waterhouse observed. According to Hammerhouse's findings, 50 percent of originators see "the next phase of regulation being implemented" as the biggest challenge they will face this year. The next most popular response was "rising interest rate environment" (18 percent), followed by "personal or company transition to purchase dominated market" (17 percent) and "big banks' ability to attack the purchase market with thin margins" (15 percent). Despite those headwinds, however, respondents were largely positive in their forecasts. Forty-four percent of originators surveyed said they believe total 40 | The M Report mortgage originations will rise in 2013, while 28 percent expect volume to remain largely flat from 2012. Twenty-seven percent expect origination volume to fall this year. In addition, in a nod to the ongoing housing recovery, 77 percent of originators polled have set their 2013 production goals higher than they did last year, while 15 percent kept them the same. (Fiftynine percent said they achieved the production goals they set for themselves in 2012.) The survey also asked originators for their takes on how to effectively run a housing finance operation. When asked to identify the primary reason they have for staying with their current employer, 31 percent of respondents cited "operational service standards," while an additional 31 percent brought up "financial strength/stability." "Technology" was the least commonly cited answer, showing up from only 3 percent of survey participants. On the other hand, when asked to identify one aspect that they would add or change about their current company, 25 percent said they want improved technology (specifically, integrated systems that are easy to use and accessible over the Web). The majority of those surveyed called for a better marketing platform and continuity support, while a small minority—4 percent—said their leadership needs to be strengthened. "The best originators in 2013 are a very experienced group of professionals that are in high demand by lenders, but who demand outstanding operations, technology, and leadership from their employers," Waterhouse said.