Deeper Thoughts
Are We Asking Ourselves the Right Questions?

A few of the team members from LodeStar are with me at the MBA Annual Convention and Expo in Nashville this week. If you read last week’s Deeper Thought, you’ll recall that we’re looking forward to comparing and contrasting the atmospheres of this event and a few other fall conferences as well as the events (content, networking, etc.) themselves. If nothing else, it’s refreshing to be in a city that isn’t a tried-and-true regular on the mortgage conference circuit. 

The Annual as a focus group

But more than just experiencing the conferences themselves, it will be interesting to experience the collective mood of those at this show. As I wrote earlier, the undercurrent at Housing Wire’s event was impending change—along with the uneasiness that comes with a down market and potential recession, of course. MBA Annual is typically one of the best attended conferences on the mortgage origination side of the industry, as well as one attended by a wide range of professionals (executive to manager to frontline, even). So it also serves as a bit of a de facto focus group for what the industry is thinking about as the year begins to wind down.

A year of transition

When I look back at the start of this year, many of the headlines and topics of interest seemed to ask questions like “will there really be an end to the refinance boom?” (which was mindboggling to me) or “how bad will it be?” The conversation in the first quarter seemed to hover around how high the interest rates would go, and how many layoffs would have to happen.

Today, we’re starting to get answers to those questions. But others are arising, and we’d expect to hear them discussed this week:

  • What’s the ceiling for the Fed’s interest rate hikes?
  • How long will this downturn in volume last?
  • Will home values begin to depreciate and, if so, when and how much?
  • When will purchase demand return?
  • (My personal favorite) When’s the next refinance boom coming?

While these are natural questions to ask for someone quite comfortable with the status quo of early 2021, I’d expect the answers won’t make that person really happy.

Change is coming, no matter what. So what will we do with it?

That said, and I’ve said it quite often, there will be opportunities. By all accounts, we’re expecting over $2 trillion in origination volume next year. That’s with a recession compounding matters. Remember, more than a few businesses profited and grew during the double-digit interest rates of the 1980s and even through the meltdown and Great Recession of the late 2000’s. I’d bet that will happen again in the coming months and years—and I’ll be stunned if the environment we’re facing ends up being remotely as adverse as those conditions were. 

If anything, I’d imagine the people and businesses planning to grow are asking questions more like these:

  • How much is our industry about to change?
  • How much of that change will be for the better?
  • What will our industry look like in five years?
  • Will the change be sustainable and long-term? Will it be deep-rooted, or superficial?

…and maybe the most important question of all…

How can I help affect substantial and positive change in the coming months and years?

I’m excited to catch up with old friends and make new contacts in Nashville this year. And I’ll be listening carefully to see where the industry’s collective consciousness is at the moment. But, most of all, I’ll really be looking for the folks asking that last question. That’s the conversation we all should be having right now.

We at LodeStar are grateful to all of our clients, friends and colleagues who take the time to view Deeper Thoughts. Please consider having a look as well at some of our other great content, including our podcast, LodeStar’s Lending Leaders and A Tale of Two Mortgages: an original webcomic for the mortgage industry, presented by LodeStar.

As always, your feedback is welcomed and appreciated!