This year looks to be a year of important changes in the mortgage marketplace.
Of course, you could insert any year in the past 20 at the beginning of that statement and it would be just about as accurate. The past five years alone would be enough to shatter the nerves of anyone who prefers a business with comfortable predictability. What year hasn't had its major shifts to which we have had to adapt in order to succeed against both traditional and new competitors?
This year is no different. That's why you could say, "The more things change, the more they stay the same." A changing 2006 marketplace will mean opportunities, not just challenges, for those nimble enough to respond to shifting consumer needs, desires and behaviors. The job of the mortgage industry is not to just identify and fret over the challenges; it's to find and develop the opportunities.
'Moving our buckets'
The mortgage industry has been fortunate over the past five years. Year-to-year, the challenge has often seemed like a matter of just putting "buckets" under the right waterfalls of consumer demand. First, the early 2000s' refinance boom as rates dropped to historically low levels--a veritable Niagara Falls that yielded a solid three years' worth of massive origination volume, followed by the equity-to-cash demand as homeowners' equity amounts grew along with their spending desires. Then demand for purchase-facilitating products as the rampant housing market drove up prices while aggressive new products made the passion for "more house" a desire perceived as an eminently realistic goal, if not a right, for consumers trained to spend by the 1990s economy and ever-expanding consumption habits.
As we head into 2006, the market is shifting from those huge waterfalls of volume into more narrow, yet still ample, streams of potential volume. This volume is based on more diverse and nuanced consumer needs--compared with the lower-interest rate refinance boom that was obviously both wide and deep.
Thus, the 2006 mindset for mortgage professionals must be to both move "buckets" while also being more proactive in creating and nurturing new streams to augment business as the overall volume of originations declines.
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