I have been around the mortgage industry for a very long time. And I don't know about you, but this industry has provided a good living for my family over the years. Yes, there certainly have been ups and downs. But overall, this industry has been good to me--and I hope you can say the same.
My own career experience, along with the resilience of each of us, makes me confident that as long as we continue to conduct business as we have in recent years, based on an ever-changing notion of "prudent lending," we will be able to provide for our families for many years to come.
Having said that, every time one turns around, the mortgage industry is undergoing another remake or change.
Every day it seems we face yet another rule change coming from regulatory bodies; or the government-sponsored enterprises (GSEs) implementing new policies or procedures; or another major private investor making changes to its market strategy; or some other "outside-of-your-control" influence.
The results of this can be devastating to a business plan if you're not properly positioned, equipped and prepared.
In order to have a sustainable business model, you must have every option available should your strategy need to change based on influences outside of your control.
It is no secret the private investor pool continues to shrink. I don't think there is any doubt there will be even more changes--as we are already seeing.
Private wholesale and correspondent investors continue to face challenges around many areas associated with the mortgage lending business. And due to many factors, the standards set by the GSEs will continue to impact the way we originate and close loans going forward.
Looking at the wholesale side (broker-/table-funded business), most, if not all, of the historic tier-one investors (major financial institutions), and some tier-two investors, have exited this market space.
With the exit of Wells Fargo & Co. several months ago, a very large share of loans (billions of dollars annually) found themselves without a home and looking to the remaining investors--who, for all intents and purposes, already had their plates full--for fulfillment.
And while the remaining private mortgage investor companies continue to expand and make a valiant attempt to fill the void, there are many constraints impacting those expansion efforts now. They include risk/capital/net-worth ratio management limitations; third-party pool limitations; and perhaps...