Perhaps one of the silver linings of these past few months of quarantine has been the opportunity to slow down a bit and look at the big picture. We haven’t had to look far to see our economy and society stretched thin in many places: medical care; record unemployment; temporary shortages of everyday goods and the like have stood shoulder-to-shoulder with the obvious human and medical toll in the daily headlines.
As I reflect on this period, I look back a little further and realize that the mortgage and real estate industry has been in an unnatural state seemingly since 2003. We’ve experienced record highs and monster dips, from three historic refinance spikes to the Great Recession starting in 2008 or the current pandemic. Within the past three years, we’ve seen the meteoric rise of the eMortgage, increasingly lofty refinance spikes and the forced acceptance of remote notarization and work-from-home labor. It almost seems as if the “new normal” for our industry is to be at historic highs or lows. In fact, what once would have been a simple cycle change around 2018—from a refinance-dominated market to a purchase market—almost seemed more unnatural than some of the other historic moments we’ve endured!
Now, this is not to compare business trends to a pandemic that has already killed thousands—far from it. However, I do find the parallel interesting, and wonder what the pandemic, when it’s all said and done, will teach us?
Will the forced use of remote notaries and remote workforces finally push the industry into a truly automated borrower experience and production process? Or will we go “back to normal” if and when the “all clear” is given?
Will we find ways to scale our virtual production pipeline—expanding quickly to meet volume spikes, then nimbly contracting when the market turns? Or will we return to the archaic ramp-up/ramp-down model more appropriate for our industry decades ago?
Will we re-think the way we staff our businesses and our production processes to allow for greater versatility and flexibility? Or will we simply re-open our cubicle farms and head back to “the way we’ve always done it?”
Will we finally address the industry model—whether it be a policy allowing for increased privatization of the GSEs and a decreased role for the federal government or one which embraces the federal backstop model protecting liquidity in times just like this? Or will we continue to kick the can down the road in an ad hoc manner?
I don’t have the answers to these questions, although I have some ideas. I do know that, as an industry, there’s no going completely back to “the way we’ve always done it.” So the real question becomes “How much will we change and progress as the result of the pandemic and its impact?”
If you’ve got some insight on these questions or other questions of your own, send them to me and I’ll compile them here in a future Deeper Thoughts! Just email me at email@example.com.
Stay safe, everyone!