Future Of Mortgage Banking
Future of Mortgage Banking
By Leif Boyd, Senior Vice President of Production
As we look at the current industry and where it will likely head over the next few years, many brokers have more questions than answers. Companies, brokers and loan officers are still figuring out how compensation reform will impact their balance sheets and wallets. As the government and banks continue to add more requirements to get loans approved, it has become harder for once qualified individuals to get loans. A few large companies seem to control a large share of the market.
State of the Industry
Large, nationwide banks are dominant players in the mortgage banking industry. However, many have begun consolidating their retail branches across the nation and are satisfied with their current volume and customers. These banks have become more reliant on offering their customers a variety of ancillary services like checking, savings and investment accounts keeping them busy and profitable.
This situation also leaves room for smaller mortgage banks to reach customers in ways the big banks used to do. It also leaves space for customers who are skeptical of large banks or may not need the gamut of services that the big banks offer.
Today’s Added Challenges
Implementing compensation reform in April of this year was a difficult challenge to overcome for many mortgage companies, brokers and loan officers. As the dust continues to settle from those regulatory changes, the industry faces two large hurdles:
- The underwriting process has become increasingly more laborious
- Lack of a viable secondary market for mortgages
Tomorrow’s Opportunities
Although the big banks seem to reign over the entire industry and have a lot of leverage when it comes to getting a loan, there are several opportunities for smaller mortgage banks. Smaller mortgage banks that can consistently approve mortgages within a standard timeframe will succeed and be profitable.
Banks that can create a positive working environment for employees giving loan originators by giving them the tools they need to succeed will do well. Banks that teach their loan originators a few basic techniques will thrive. These techniques include:
- Providing excellent customer service
- Researching and prospecting the right potential customers
- Listening to prospective customers’ needs and meeting those needs
Adding value to customers’ businesses by providing customers with information to help them succeed.
A more comprehensive look at this topic can be seen in the October 2011 issue of National Mortgage Professional