The last 365 days proved that as much as the industry tries to predict the real estate market, nothing beats proactively preparing for any type of lending environment. The best example of this was also one of the biggest mortgage industry trends of 2019: the drop in interest rates.
By the end of 2018, there was an overwhelming amount of negative housing data points that didn’t bode well for a strong start to last year. A majority of the forecasts for 2019 predicted that interest rates would rise, causing would-be buyers to continue renting, along with rising home prices and tight inventory making affordability sound impossible.
The reversal of these predictions spawned a refi boom, and when the top industry voices were asked to share which trends not only took the industry by storm last year but were expected to carry into 2020, the trend that was on the forefront of everyone’s mind was the year’s record-low interest rates, averaging around 3.9% in 2019 according to Freddie Mac.
In his video for HousingWire, United Wholesale Mortgage President and CEO Mat Ishbia quickly stated at the beginning, “Looking at 2019, it was an unexpected year for most. The rate rally was the big news.” He also noted that it was a great year for most people in the industry that helped a lot of consumers across America.
The pleasant surprise of low interest rates is the most obvious trend of last year, but to proactively prepare for 2020 and beyond, lenders need to pay attention to the other hot trends brewing.
HousingWire asked five voices in the industry to share what they uniquely saw happening in 2019 and what top mortgages trends people in the industry should watch for heading into the new year.
MOVEMENT MORTGAGE CEO CASEY CRAWFORD
In 2017, Movement Mortgage CEO Casey Crawford not only purchased First State Bank in Danville, Virginia, but he also gained a piece of history. Movement Mortgage CEO Casey Crawford shared the deep roots that the bank has in America’s history, saying, “[First State Bank] is a 100-year-old institution founded in Southern Virginia that was serving the black community during the Jim Crow South.”
He explained that during this period, the bank opened up credit options for the community when they were explicitly being discriminated against and denied access to credit products. Last year, the Movement Mortgage team decided to look back and see how black homeownership has changed over the years.
They were shocked to find that today, the country is seeing the widest rate of disparity between black and white homeownership in 100 years. He continued to expand upon this long-standing problem in America, adding that the good news is there are 1.7 million qualified black Millennials who are ready to purchase homes.
The trend that will carry into 2020: Lenders need to educate this community about homeownership opportunities to help bridge the wealth gap that exists in the United States today.
THE KNOWLEDGE COOP VICE PRESIDENT OF TRAINING AND DEVELOPMENT NATHAN KNOTTINGHAM
“Wire fraud” is a topic that should’ve come across the industry’s desk more than a handful of times last year. It’s a growing and pressing issue that people shouldn’t become numb to.
Nathan Knottingham, vice president of training and development with The Knowledge Coop, gave his unique take on how cyber security seized the industry’s attention in 2019, and is something his company has heavily focused on the last few years.
2019 brought an increase in deep fake accounts and security threats, and Knottingham stressed the importance of understanding and guarding against the dark web. “This one needs to be a continued priority going forward,” he said. “And hopefully, the heightened awareness will keep all people in the industry on alert and help the IT professionals do their job to keep organizations safe.”
The trend that will carry into 2020: The industry needs to stay vigilant in protecting consumer information as hackers become more sophisticated.
LUND MORTGAGE TEAM OWNER/BROKER LISA LUND
With the recent refinance boom in 2019 serving as a great example, it benefits lenders to be proactive rather than reactive to what’s happening in the market. Owner/broker of Lund Mortgage Team Lisa Lund stressed, “Although 2019 was record-breaking for most of us, we have to remember it doesn’t last forever.”
A small victory lap after a great year is fine, but this doesn’t mean lenders can rest on their laurels. Lund asked, “What’s your business plan for 2020 or even 2024?”
In her video, she emphasized the importance of reinvesting back in yourself or in your company, adding “If you do that, you’re going to ensure a lifetime of success, not just while we’re all riding this crazy refinance boom.”
The trend that will carry into 2020: Companies need to make sure they are always working on ways to improve and evolve with changes in the market.
THRIVE MORTGAGE DIRECTOR OF EDUCATION AND ENGAGEMENT JAMES DUNCAN
Technology and innovation are two words that showed up in many articles and discussions over the last few years, and this isn’t likely to change moving forward. However, the focus of these technology conversations will, as Thrive Mortgage Director of Education and Engagement James Duncan shared in his video.
The rapid pace of new technology has been advancing faster than many lenders could keep up with. “They just knew that there were inefficiencies in the process and the workflow that needed to be addressed and fixed,” Duncan said.
This trend started to shift as more lenders started asking better questions and the right questions in 2019, leaving this next year to really put this technology to the test. Duncan explained that the leaders who pull away from the pack aren’t going to be the ones who simply adopted new technology, but the ones whose focus was on adopting technology to enhance the borrower’s experience and to improve the level of service and advice that they provide to the client.
The trend that will carry into 2020: Lenders need to focus on the impact technology has on the borrower experience.
UNITED WHOLESALE MORTGAGE PRESIDENT AND CEO MAT ISHBIA
In a landmark ruling for the mortgage industry, as of Nov. 24, 2019, originators could officially move from a bank to a nonbank or to a new state and keep originating new mortgages without having to wait for a new license.
The transitional authority ruling eliminated the required period that originators had to wait for a new license before they could begin originating at their new job, which was a welcome change after a long push from the mortgage industry for new regulation.
United Wholesale Mortgage President and CEO Mat Ishbia pointed to the change as one of the biggest trends of the year, saying, “This has already started to impact the mortgage broker channel, and we’re seeing even more of it coming because of compliance support and technology support, along with some of the things that weren’t available in the broker channel in 2014, 2015 or 2016.”
The trend that will carry into 2020: The transitional authority rule will have a big impact in helping originators move jobs.
On top of all these trends, the industry is also moving ahead with a new commitment to community and collaboration. These five industry voices are just the start of a new era, one where lenders are collectively making the industry a better place. As more trailblazers join this movement, HousingWire is here to spotlight the trends that are helping move markets forward.