What Is Going To Happen Next? – March 18th, 2020

 

Issue Fifteen: What Is Going To Happen Next?

Just when you thought things couldn’t get any stranger for the mortgage industry…

The seemingly endless boom in refinance origination, which started surprisingly enough in 2019 and only seems to grow as we move deeper into 2020—got yet another jolt with an emergency rate cut by the Fed recently. This, of course, was in response to the anticipated economic impact of the COVID-19 pandemic.

Now please let me be clear. This is not to make light of the very real and frightening impact the Coronavirus will have on us. Nothing in this article should be construed in any way that denies this pandemic is anything but a tragedy.

Instead, I’m just taking a look at our current climate from an industry perspective. This is only me shaking my head in amazement at the surreal amount of change the mortgage industry continues to see on an almost-daily basis. What used to be a cyclical industry is now more of a magic carpet ride or an exercise in shaking the Magic 8 Ball to find even a clue as to what the future holds. Just when you expect the latest re-fi surge to run its course, along comes something else to drive it even higher.

It seems even the well-worn phrase “fish jumping into the boat” doesn’t do justice to the amount of refi volume lenders (and their vendors) are doing. I’m hearing stories about firms doing thousands (thousands!) of closings per day. I’m not even talking about the biggest of the global banks.  It’s all hands on deck for all the lenders I know.  Borrowers are being forced to wait longer on their applications. Some loan officers can’t even get back to applicants on the same day. Lenders are raising rates because they are at capacity, who thought this would happen!

What will the next three or four months hold for our industry? Who knows? We know that the pandemic will have very real, and very negative effects upon our world and our greater economy. But there are nonetheless more than a few who feel the mortgage industry could escape much of the economic blow—especially those who have made significant and practical investments into technology that allows their businesses to continue in spite of significant disruption. If anything, we may find ourselves wishing we’d moved even faster into the realm of eClosings and digital mortgages. Perhaps this will spur us to accelerate our industry-wide transformation.

It’s an unreal and almost unbelievable story. And it may be a less-than-subtle reminder from the Universe that we need to be prepared at all times for anything.

Be well.

Jim

 

P.S. As you can see, we are always looking for contributors! If you would like to be featured in an upcoming LodeStar report, please contact me at jpaolino@lssoftwaresolutions.com

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