According to Dave Krichmar, a banker with Legend Lending Corporation, the mortgage market will be competitive with narrow margins, limited business, and lenders leaving the sector in 2023. Low industry origination volume certainly leads to further layoffs, which is why LOs, like Krichmar, want to hone in on their own niches to determine where the business is. Like in 2022, LOs will compete for market share with less rate-sensitive mortgage products. They will need to concentrate on the purchasing market heading into the new year, whether it is through social media, establishing contacts with real estate brokers, or returning to the traditional methods of knocking on people’s doors.
The greatest asset that most people hold is their home. According to Nick Smith, managing partner and CEO of Rice Park Capital Management, home equity products will rule the market in 2023. To continue their lifestyles, Smith added, consumers would need to monetize their assets after credit card usage hits its maximum.
Non-qualified mortgages (non-QMs), which are loans for borrowers who do not fit within the standard conforming loan credit box, such as self-employed borrowers, gig workers, and real estate speculators, are also in high demand and are not likely to diminish any time soon. In a Housing Wire post on the forecast for non-QM in 2019, Tom Hutchens, EVP of production at Angel Oak Mortgage Solutions, discussed how agency refinances are nearly non-existent and how non-QM may help safeguard volume and referrals.
In addition, Fannie and Freddie’s main affordable mortgage programs, HomeReady and Home Possible loans, are aimed at borrowers with lower incomes and poorer credit scores who want to accumulate wealth via homeownership. As such, LOs will advocate for mortgage products, including remodeling products, construction loans, and temporary rate buydowns that temporarily cut mortgage rates during the first term. Click here to read more.