With rising interest rates, cost of funds for loan originations is at the heart of mortgage lender survival. 

In the last few years, private equity and larger mortgage originators have acquired smaller ones.   

But many mortgage lenders who’ve survived until this time are unable to secure additional capital or are unfit for acquisition.

Mortgage originations business costs continue to rise, which threatens the stability of lending platforms today. 

Through the financial crisis and Dodd-Frank legislation, since 2009, compliance and cost per loan have dramatically risen and put pressure on margins. 

Insolvent mortgage originations shops and negative reactions to thin margins at existing companies, mortgage originators today are looking again for lending platforms that they can leverage for product, price and service. 

These originators are also searching for platforms with a solid reputation and stability through financial cycles. 

That's where I come in; I'm actually hiring loan officers and I stand by my recent Facebook post, here:

Ivan Choi FB post

For loan officers, it’s extremely tough to choose whether to affiliate with a bank or nonbank.  The choice is often personal one, based on service delivery and desired lifestyle.

Over the last 3 to 4 years, mortgage news and commentators have featured the rise of nonbank lenders. 

While the business results have been positive, rising interest rates and cost of funds is going to be a real test.  As rates continue to rise, money-center banks may again become the dominant choice for individual loan originators.


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