If you attended the recent Conference of Regional MBAs in Atlantic City, you heard Barry Habib, President of MBS Highway, talk about why he believes we may see another surge in refinances if/when the Fed raises short-term rates (Rates). Barry made a similar prediction last year of decreasing rates and was correct. We did see loan rates drop when the Fed raised rates in December.
On the other side, both Fannie and Freddie are forecasting a drastic drop in refinancing activity in 2016, regardless of any Fed activity. They also predict an overall drop in purchase financing over the next 3 to 5 years. That translates into fewer loans to originate for everyone. Who do you believe?
In a recent Fannie survey of senior mortgage executives, a vast majority said they planned to increase their origination business in 2016. That would seem to be a tall order when everyone is forecasting a drop in overall mortgage loan activity over the next few years. It appears that the game is on and competition will be fierce for loans.
If you attended the conference, you would have also heard David Stevens, President & CEO of MBA, say that the homebuyer demographics are changing. Based on current information, the future buyers will be a majority of Hispanic non-White consumers. Lenders need to be prepared to offer the products and services needed to satisfy the needs of these home buyers, along with other minority groups. Are you prepared?
Just goes to show that there is a myriad of views and forecasts but one thing holds true. People will still need mortgage loans to purchase or refinance their homes. It doesn’t matter the race, color, creed and/or “demographics”; mortgage lending is still mortgage lending.
Offer the consumer products needed to serve their needs at a fair price with premier service. Then, above all, deliver what you promise. Not because it’s the law but because it’s the right thing to do. Do so and you’ll always be in the game.
Go out, compete and lend responsibly.