Let’s get this out of the way, first: I don’t love the term “new normal.” It’s cliché and it’s misused. Many of the things we’re doing in this second stage of the pandemic, I can guarantee you, will not survive long after the virus. But let’s agree that things will definitely be different for a while, and that some permanent change will definitely come to our world, as well as our industry.
We’ve spent some time here talking about what some of that change might look like: the rise of the eClosing and remote notary; the embrace of more work-from-home options and so forth. However, I’m seeing some other opportunities to improve as well. The more I hear about the servicing liquidity challenge and forbearance spike, the more I wonder if we’ll see a spike in default and foreclosure. It’s been a long time since we’ve seen any kind of “counter-cycle” along those lines, and while nobody roots for people to lose their homes, it does unfortunately happen. You’ll recall that the last default and foreclosure surge led to a black eye—actually, several black eyes—in the ways our industry handled or mishandled those foreclosures. I’ll be interested to see if now, ten years after that period, we’ve updated, automated and improved our management of the process.
I will also be interested in a potential market shift back to more purchase volume. To be honest, I don’t think anyone truly has 100% confidence in any forecast at this point. I’ve heard everything from “depression” right back to “resumption of the boom re-fi market.” I suspect the truth will be somewhere in between. But it’s at least a real possibility that credit availability will shrink, which may slow the re-fi train for a bit. If you’ll recall, some in our industry struggled a bit the last time we faced a purchase market (around 2018). Will we be ready this time if it happens again?
Finally, I think it’s possible we see an uptick in regulatory and enforcement activity. That’s inevitable when the government injects any kind of consumer assistance into the market, which is happening at unprecedented levels right now. None of us enjoy thinking about compliance, but if you’re not minding your “P’s” and “Q’s” on the QA and compliance side now, the regulators and enforcers will soon be thinking about you.
There’s definitely plenty more change coming to our industry. We haven’t always shone in times of turbulence in the past, but I’m betting—based on how well we’ve handled a 100-year pandemic so far—that this will be our opportunity to right some past wrongs.
I’d love to hear your thoughts about the next wave of change in our industry. If you’ve got some insight on this 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 firstname.lastname@example.org.
Stay safe, everyone!