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What does the mortgage industry’s post-pandemic future hold?

Three prominent mortgage industry leaders predict pent-up demand and a still-percolating purchase market will blossom in the post-pandemic weeks

The challenges facing the mortgage industry were raised by three prominent industry leaders during a webinar sponsored by the National Association of Minority Mortgage Brokers of America.

Kristy Fercho, president of mortgage at Flagstar Bank in Troy, Michigan, predicted that in 12 months the industry will “still be dealing with the remnants of COVID.” She noted that her bank sent all of its employees home on March 13 to test its telecommuting system and business continuity plan, not realizing that the state would issue a shelter-in-place edict that week. And while the work-from-home set-up has not been problematic, Fercho wondered what will happen when it is finally lifted.

“I think in the next 12 months, we’ll still be dealing with what’s going to happen with work-from-home,” she said. “How do you transition the workforce back into the workplace?”

Fercho acknowledged that the company’s internal business productivity metrics showed the at-home employee structure did not disrupt operations.

“This past week, we asked our people if they were more productive at home or at work and 96% of our employees say they’re about the same or have higher productivity working from home,” she stated. “Do we stay letting people work remotely?”

But while the pandemic is still present, Fercho believes the purchase loan market could stage a comeback sooner than expected, pointing to the latest Mortgage Bankers Association applications survey.

“If you actually dig in and go into the state level data, it actually showed that the top 10 states saw an increase in purchase week-over-week,” Fercho said. “I think the opportunity now is to really continue to invest and nurture those referral partner relationships.”

Laura Brandao, president of American Financial Resources in Troy Hills, N.J., stated her company is fixated on having the right talent in place for the next 12 months.

“I have a management meeting every Friday at 11 o’clock,” Brandao said. “And the first thing I say to my team is not only do we need to find the talent, we need to grow the talent. We need to develop the talent and we better be prepared on how to do it remotely. We better have that plan and training program to be able to do it for people that are brand new to our industry, that have never gone through that training before, and make them successful.”

Brandao agreed with Fercho on the purchase market’s vibrancy, revealing that her company’s activity was “probably 80% purchase.” She also identified potential new homebuyers who are eager to get into the market once stay-at-home orders are lifted.

“Right now, people have spent more time in their homes than they have ever in their entire lives,” she explained. “That has created a lot of opportunities, with people saying: ‘Maybe I want a bigger backyard. Maybe I want to have a place where I can have a home office, because now I might be working remotely much more.’”

Brandao also theorized that markets with large shares of second homes may see those properties get listed after the pandemic abates.

“You have some people that have second homes that are like, ‘You know what, I don’t think I’m going to go to Florida for the next two years because I don’t want to get on an airplane. Instead of paying that mortgage, maybe I’ll sell my second home.’”

Michael Dubeck, president and CEO of Planet Home Lending in Melville, New York, praised federal policymakers.

“I think the regulators have been very quick to bring a lot of solutions and clarity to the table,” he said. “I’m actually thinking we’re pretty fortunate to have a Treasury secretary that speaks the word ‘mortgage’ and knows what a rate lock and a servicing advance is.”

Dubeck also predicted buyer interest will not wane in the immediate post-pandemic months.

“Maybe the homebuying season is just going to be pushed out till July or August,” he said. “And at that time, I think we’ll see a huge increase in demand and pent-up activity, both from buyers and sellers. You know, we saw a lot of demand in January and February. And the truth is that the buyer that was a buyer a month ago is still interested in being a buyer.”

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