In the webinar recording above, our LendingQB product team and LendingQB clients discuss the state of mortgage before the COVID-19 pandemic, what happened after the pandemic began, and what is up next for mortgage. Prefer to read instead? Please see the in-depth summary below or watch the on-demand recording above.Webinar Panelists:
- Toma Ghiran, Systems Administrator, FlexPoint Mortgage
- Nick Santarelli, Vice President, Mid-Island Mortgage Corp
- John Cosgrove, Product Compliance Analyst, MeridianLink
- David Wieczorek, LendingQB Product Group Manager, MeridianLink
In mid to late March (depending on your geographic location) the American workforce saw a mass exodus from the corporate office space into a home office setting. Technology that is available today and that most people use in the office to complete their daily tasks and communicate digitally with various teams, made this shift possible. Additionally, this technology made it attainable for many businesses to continue operations and ensure that all of their employees were able to work.
Upon shelter in place orders being implemented, both FlexPoint Mortgage and Mid-Island Mortgage Corp allowed all employees to work from the safety of their homes, providing laptop computers to those who needed them. This made it possible to socially distance within branch locations and allowed for core teams to safely be in each mortgage lending location. Of course, there was a small adjustment period and a few hurdles, like slow WIFI for various employees. Diverse cloud technology made it simple for mortgage lenders to accommodate their staff and ensure they are safely completing their daily tasks.
Lenders had to be nimble and adjust to the growing needs of digital technology, as well as client and investor requests. Certain areas of lending were doing a lot better than others and lenders had to pivot. At the end of March 2020, mortgage loan applications were at an all-time high and consumer loan applications saw a significant decrease, which can be explained by many car dealership closures.
So what’s going on now? The biggest news is the recent announcement by Fannie Mae and Freddie Mac. They released the Adverse Market Refinance Fee, that adds a 50 basis points fee (0.5%) to most mortgage refinances starting Sept. 1, 2020. Below you’ll find a quote from each of our panelists and what they think about this recent announcement.
Toma Ghiran, Systems Administrator, FlexPoint Mortgage
“A lot of the shops that are out there, looking at selling APR's, are going to go a little bit higher, or the rate that they're going to be offering is going to be a little bit higher. And that's basically the impact that I'm seeing. And I don't think that it's really going to last, I think it's more of a reaction to servicing.”
Nick Santarelli, Vice President, Mid-Island Mortgage Corp
“For loan locks that are not funded by September 1st, the lender is going to happen to hit on the money. At the end of the day, they're going to have to recoup their costs somehow. I think for the foreseeable future you're going to see an uptick rate so the lenders can recoup that money after that.”
John Cosgrove, Product Compliance Analyst, MeridianLink
“I think this is more of a reaction to secondary marketing servicing and things along those lines. As far as compliance impact. Obviously, you still need to make sure that all facets of that transaction meet all applicable federal and some state level guidelines, but we don't foresee any changes or anything like that at this time. This is essentially temporary pricing adjustments.”
David Wieczorek, LendingQB Product Group Manager, MeridianLink
“I expect that initially they'll try and pass it along to the consumer, which may drive down volumes a little bit in the short-term. Then as those volumes are driven down a little bit, I expect the profit margins to go down a little bit as well.”
The early stages of the pandemic brought with it a lot of uncertainty, but it seems as though we have all adjusted to the new normal and the new way of life. There were several items that mortgage lenders had implemented as COVID-19 caused adjustment and realized that this is something that they will make a pillar within their business even when COVID-19 is a distant memory. One of those items is implementing electronic signing of documents, which has reduced the lending process significantly.
Another lesson that mortgage lenders have learned and will continue perfecting, is the usage of cloud-based technology throughout all aspects of their business. This technology makes it easy for staff to work remotely, creates consistency in workflows, and makes it less work to pivot and adjust to changing client and investor needs. Additionally, mortgage lenders have taken a lesson from diversifying their client and investor relationships, to ensure they have various options no matter what happens in the world.
The biggest takeaway we are seeing in mortgage lending and will continue to see, is the necessity of innovation. This necessity is not only with the technology that is used by mortgage lenders, but also the workflows and behaviors that were adapted and may never change.
This on-demand webinar is part 3 of our Summer Road Trip Webinar Series. Be sure to check out the rest of the recordings to stay up to date on the latest in digital lending. Click below to learn more.