Mortgage Survey: Originators Are In for a 2014 Reality Check

A whopping 69% of mortgage loan originators believe the mortgage originations will drop in 2014 compared to the previous year, according to Hammerhouse’s Annual Survey of Originator Opinions

Another 17% think volume will increase, while 14% believe it will stay about the same. But while 56% admitted to not achieving the production goals they set for themselves in 2013, more than half (53%) say their goals for this year are even higher. 

“In our 2014 survey we hear the voice of concern among originators regarding the future. This year is where originators and lenders must come to terms with the new realities of the mortgage industry,” said Drew Waterhouse, managing director of Hammerhouse, of the survey. “The discrepancy in industry versus personal expectations relative to origination volume deserves close monitoring as it could signal a coming reality check.”

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While in past years loan originators have been concerned about the regulatory environment, this year’s survey shows greater concern for the mortgage market. 

“Adding new relationships to support a purchase focused business” is the biggest challenge loan originators will face in 2014, a majority 44% said. Others pointed toward “a lot less business and a lot more competition” (23%) while 21% remain concerned by the next phase of regulation being implemented. 

More than a quarter (26%) of MLOs said they’d look for improved operational execution in their company in order to support the business’s sustainability, assuming the interest rate environment continues to go up in 2014 and the purchase market remains the company’s primary source of origination.

Another 22% would want their company to support the offering of niche products. However, a quarter believed their business is already well-positioned to take advantage of a purchase market. 

“Top originators are concerned about the impact of changes in the mortgage market and are holding lenders accountable for providing a supportive environment for their business,” said Waterhouse.

Nearly four in 10 (36%) of those surveyed said that their current employer’s leadership and culture is the primary factor for remaining at their company. Another 26% pointed to their employer’s financial strength and stability, while just 10% named compensation plan as the biggest reason for staying. 

However, while operational and execution challenges was the top reason why an originator would move to a new firm, at 30% of respondents, the next highest amount (19%) said they’d leave if compensation or pricing was not competitive. 

Another survey question asked after what a mortgage loan officer would to do strengthen or change their current company.

A majority (29%) said they’d add a better marketing platform or continuity support, while nearly a quarter (24%) indicated that supplemental lead generation would strengthen their company. 

Of those surveyed, 44% were licensed in one state while 39% had licensing in multiple states. Another 7% were working toward licensing, and 10% were not licensed with no plans to do so. About 81% of survey respondents have been originating mortgage loans for more than 10 years, says Hammerhouse. 

View the full results of the 4th Annual Survey of Originator Opinions. 

Written by Alyssa Gerace

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  • Good article and good points to focus on for 2014. One thing I will say about 2014 is that it will be a very interesting year, especially for the reverse mortgage industry as a whole!

    Change and more change, our entire world is changing, why not our industry. We either adapt and capitalize on others weaknesses or we wither away and die, that is it in a nutshell.

    We can improve our originations, we have a much larger client base to work with, look at the numbers, look at the amount of seniors turning of age to qualify.

    I understand, the playing field is different now, we have lower principle limits to deal with, we have the 60% rule to deal with, we have the Financial Assessment rule coming out at any time now, I could go on and on about the negatives.

    However, we have many positives. Small community banks need to increase their customer base and revenue in order to survive, go after them. The reverse mortgage can bring in new faces, you can be their reverse mortgage specialist, sell them on how you will increase their customer base for them.

    Add to your existing platform the more affluent borrower, the borrower with little or no debt on their property. In short, in order to survive you must go about originating differently than you once did. We will have many opportunities out there if we open our eye’s and look hard enough and you will succeed if you want to bad enough!

    John A. Smaldone

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