May 3, 2023
Needham, MA--For lenders, a slower market is a great time to evaluate your partners.
Believe it or not, the news out there isn’t all bad. Yes, volume is down and the fourth quarter of 2022 was especially tough for many. So, how about some good news for a change?
Not too long ago, Fannie Mae published its Economic and Housing Outlook. And while there are definitely a few pessimistic predictions and observations within, it’s encouraging to see that they’re still forecasting 2023 purchase volume to be $1.3 trillion and refinance originations to amount to $367 billion in 2023. They further predict that 2024 will be even better, when Fannie predicts just over $2 trillion in total origination volume.
While there’s a lot of other data to temper that prognostication, the fact is that, as the mortgage industry continues to contract in adjustment to the market, there is revenue out there to be won.
What the numbers tell us
The numbers tell us that, like every single previous down cycle, this slump will inevitably end, too. And just like every other rebound we’ve ever seen, it’s likely that far too many of us will be scrambling to ramp up our capacity when the volume spikes. We also know the pain of how much longer it can take to onboard new hires than it does to receive more orders. The interim period can be painful. Nobody wants to leave money on the table or have to explain to a client why an order is overdue.
For lenders and REALTORS, while things are a little slower, that’s exactly why now is a good time to kick the tires on your own operation. Many are doing just that. And one area that tends to get overlooked is an honest assessment of your service providers.
For many lenders, choosing a title partner can come down to finding the biggest one available. Throughput is important—especially during a refinance boom if you’re producing a lot of volume. But, right now, it’s likely that capacity and bandwidth are far less an issue for most.
Do your title partners truly understand their markets, and are they sharing that expertise with you?
We’ve entered a bona fide purchase market, where the capabilities, expertise and quality of the title company are every bit as important as its capacity. Lenders should be asking if they’re getting value from their title partners. Do the title companies proactively offer local expertise and experience, not just on compliance matters, but on the markets themselves? A good title company keeps its finger on the pulse of their geographic footprint, and likely has great relationships with local brokerages and lenders as well. For lenders seeking to introduce new products or enter new markets, why not check in with your service providers in the markets you serve?
Your title partners should not only understand the customs and requirements of their markets, but get updates and training on a regular basis, too. If anything, the best of them (including Kriss Law/Atlantic Closing & Escrow) regularly make available training and resources to their lender and REALTOR partners to keep them abreast of changes.
Title companies as problem-solvers
Finally, if your title partners drop the ball when complex challenges come up, now is the time to revisit your needs and requirements of title providers. The very best title companies shouldn’t require a lot of attention from their clients. The ride should be fairly smooth for most transactions. And, on the occasion when a complexity arises, having an experienced attorney agent who’s likely seen that scenario before saves clients time and money.
The good news is that we’ll be seeing more transactions, and likely soon. We’ll be back to extremely busy before you know it. So, are you taking this opportunity to ensure you’re fully ready for the next upswing in the market?
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