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16 | M R EP O RT FEATURE F rom the tone of some of the conversa- tions I've been hearing over the past six months, one would anticipate that a recession—or at least, what we used to call a "counter cycle," or default/REO surge in the market—was coming. However, if it hasn't already come to pass by the time this piece is published, it will very soon. No, not a recession. No, not an economic catastrophe. A purchase market cycle. At times, I think today's industry has been a bit too dramatic about the difference between a refinance cycle and a purchase-dominated cycle. Admittedly, 2020 was breathtaking. There was virtually no need for marketing. The biggest challenge to our industry was finding a way to capture all the refinance orders and close them before fallout could occur. However, I believe we should be welcoming a strong purchase cycle rather than cursing it. It's almost impossible (although 2020 probably taught us that almost nothing is impossible when it comes to interest rates) that we'll see a replay of last year's extraordinary volume again. Too many market and general economic factors are coming together to support the refinance wagon much longer—at least, not at the levels we saw last year. Nevertheless, many respected economists are also telling us that home values and home sales will continue to climb over the coming months. That's not an emerging threat; that's an opportunity. If you don't believe me, let's have a look back to a time many in this industry—except those of us who lived through it—seem to have forgotten. A History Primer, by the Numbers M y premise is simple. If you don't believe a lender can be successful, even very success- ful, without the occurrence of a refinance market, you aren't aware of the headwinds the mortgage lending industry faced in the 1980's. I'll also make the following disclaimer for my argument: we live in a starkly different regula- tory environment today than we did in the 1980s. Deregulation was only beginning. Glass-Steagall was still the law of the land. However, the point still bears consideration: if lenders could succeed in the environment they faced in the early 1980s, and then again in the late '80s, they certainly can succeed in 2021. Let's start with the numbers, and these are taken directly from Fannie Mae research (Monthly The Change of Cycles When it comes to the emerging purchase market, a history primer is in order. By The Hon. Joseph J. Murin