Here’s What Insiders Say Will Happen In 2022 …

Well, 2021 was a year for the history books for sure. We thought COVID was behind us and then we were hit with Delta and now Omicron is raging. Refinances dried up and purchases blew up. But enough about 2021, let’s talk about 2022. PROGRESS in Lending reached out to 16 mortgage industry thought leaders and asked them to predict what will happen in our space next year. Here’s what they said:

“Affordable Housing will be a central issue next year. I see two possible solutions: we can figure out how to use the excess commercial real estate in our cities and turn it into affordable housing, or the government could find ways to provide incentives to builders to build more affordable housing. What we probably should not do is mandate that lenders put people into homes when they are not yet ready to take on that financial burden.”

>>Joseph Camerieri, Executive Vice-President and Client Account Management Executive at Mortgage Cadence

“More future Homebuyers will focus on being co-owners. This will enable 25- to 35-year-olds to become owners in the least affordable housing market we’ve seen in decades. Jess, a renter in Kansas City with four other roommates, told me he was priced out of the market. His income was never high enough and houses in his income range were never available. Buyers who become co-owners can overcome these challenges, if they can find others like them and if they have a way to allocate ownership of the house — but it can be done and we’ll see more of it in 2022.”

>>A. W. Pickel, III, Director of Lender Relations with SocialEquity

“Most lenders will see their businesses shrink next year. Their loan officers just aren’t trained to originate purchase money business or haven’t had to focus on it for a very long time. We’ll see more branch managers coaching LOs to pick up the phone in 2022, because our data shows that LOs who have a program of outbound calling will close twice as many loans as those who don’t. That will make up for a lot of lost volume when the market tightens in next year. All they have to do is help their LOs overcome their call reluctance, which our experience tells us can be done.”

>>Chris Harrington, President and Co-founder of Usherpa

“Lenders know they need better automation to reduce costs in a purchase money market when volumes are dropping, so we expect to see a good amount of new implementation in 2022. The problem is that lenders need a lot of support when it comes to effectively managing, testing, and implementing these new systems. In a normal year, 85% of projects will either fail or never achieve the anticipated ROI. Next year, I expect to see more lenders calling in third parties to assist in this process to increase their odds of success.”

>>Keith Kemph, President & CEO of BlackFin Group

“With all signs pointing towards a much smaller refi market and a super competitive purchase mortgage market, lenders should be searching for innovative ways to stand out with applicants. We know that 71% of all applicants analyzed by our platform can improve their credit score by 20 points or more within 30 days. Those lenders that focus on optimizing applicant credit early in the process will be able to qualify and retain more leads in 2022.”

>>Mike Darne, Vice President of Marketing at CreditXpert

“Today’s borrowers are shopping with 2-to-5 lenders for their new home loan. They’ll choose the one they trust to close in 2022. Winning that trust will drive LOs to provide the borrower with information that is both accurate and capable of helping them save money on their mortgage every single month. And they’ll have to provide it earlier in the process. Those who can do this will lead the industry.”

>>Nomi Smith, MBA, Founder and CEO at PMI Rate Pro

“For as long as I’ve been a part of this industry, loan originators have struggled to find good new business leads and to forge strong partnerships with their partners in real estate sales. This is going to get worse in 2022 and that’s why I expect to see more loan originators going directly to consumers to get new business. In the past this was very challenging, but today we know that consumers are shopping online. Lenders that find the right online destination for home buyers, and it’s out there, will be successful in 2022.”

>>John Glen Stevens, President of SRE Technologies

“Recruiting top people will still be a top concern for lenders in 2022. With volumes dropping in a purchase money market, they can’t afford to lose their best people or fail to attract top producers. There is a lot of debate about what American workers are looking for in the perfect job. A much easier question to answer is: what are employees no longer willing to put up with? High up on this list is outdated technology. Lenders will pay more attention to the tools they offer workers in 2022, thinking carefully about the technology these job applicants will encounter as they evaluate their alternatives.”

>>Valentin Saportas, CEO at MortgageHippo

“As state and federal restrictions on foreclosures continue to expire, the backlog of loans in default is likely to result in more foreclosures in 2022. However, the “wave” that the CFPB and other federal agencies feared should be mitigated by the expanded state, federal and GSE programs from pandemic-related defaults.”

>>Jennifer Keys, SVP of Compliance Solutions at Covius

“2021 was the best year for non-QM, even beating out 2019 volume levels. We expect this trend to continue and as more originators enter the field, they’ll be looking for technology to help brokers and LOs understand eligibility and quickly efficiently close on non-QM loans.”

>>Allen Meigide, Director of Operations at LoanScorecard

“With rising interest rates and home prices remaining high, we are anticipating a decreased demand for refinances. This sets the stage for lenders to pivot to home equity lending. Homeowners that decided to stay put over the last year may be ready to unlock their equity to improve their housing. The decreasing mortgage origination and refinance volume also means the opportunities for lenders will grow more competitive.”

>>Ken Dickerson, VP of Sales at LenderClose, a portfolio real estate and home equity lending technology platform

“Due to the ongoing labor shortage, more reliance on AI technology will dominate the operational end of the mortgage world. Employers will realize the benefit of AI software to assist with meeting SLAs, as well as realize more profitability per loan. Also, marketing departments will have to shift to even more social media pages to attract younger home buyers. Traditional methods of video production to gain viewer attraction will have to be replaced with more less produced videos taken on a smartphone. Lastly, a lack of sufficient infrastructure will be acknowledged as a reason why new homes cannot be built in all markets to meet the demand placed by potential homeowners.”

>>Fobby Naghmi, National Sales Manager at First Option Mortgage ATL, GA: Host of Laugh, Lend & Eat, the Podcast; Author of Falling Forward, Mishaps on the Road to Happiness

“Competition for home buying will remain strong, as will people buying homes “sign-unseen,” relying on video tools to remotely tour homes. Home lending will incorporate more predictive analytics in deciding who qualifies for what loan amount and rent-to-buy scenarios will increase. Homebuyers will continue to pay a premium for outdoor amenities, such as yards, tree houses privacy, pools, etc., with a continued American interest in staycations. Unfortunately for lenders not all of these outdoor amenities are included in today’s appraisal models.”

>>Brad Sivert, Head of Marketing & Proptech at Tavant, a top Silcon Valley-based provider of digital lending technologies.

“Today data is the overarching framework of any business and as a result enterprises will need to evaluate how they manage data in order to keep up with the digital transformations of 2022 and beyond. In 2022 data management will be one of the top priorities for any and every organization that values growth in an increasingly digitalized world. Some of the top data management trends for 2022 will be that companies are introducing new ways to analyze data, in the form of AI, in order to understand their customer base. AI is leveraged to provide useful insights on customers – to understand their preferences, likes, and dislikes as a means to provide a better customer experience. Also, 2022 will be the year where businesses create new pipelines and analytics for new business processes. For instance, some financial companies are coming up with new systems to keep up with the infusion of data they get regularly and balance that with the need for regulatory compliance. Lastly, we should also expect to see the empowerment of any corporate employee, even non-BI analysts accessing and leveraging data. There will be a big push to enable self-service data users, or regular employees to access data at their will to drive individual business decisions.”

>>Yael Ben Arie, CEO at Octopai, a provider of automated data lineage, data catalog and data discovery solutions.

“2022 will be a very good year for the purchase market, at or near 2021 levels, but the refinance market will shrink significantly. Expect refinances to be down at least 40% from 2021, and the meaningful drop in overall volume plus the inefficiencies exposed during the last 18 months will motivate most lenders to look hard at process improvements. The future belongs to lenders who maximize productivity by focusing on eliminating duplicative functions, the rekeying of data and the constant quest for information and statusing.”

>>Patrick Stone, Chairman and CEO at Williston Financial Group

“2022 will be the year of the haves and have nots among mortgage originators. Those who got fat and happy on refis will starve, while those who have stayed steadfast focusing on purchase business will continue to thrive, despite rising rates. Among those thriving they’ll level-up ops and sales support teams with the availability of strong talent flooding the market from the Refi shops. And many call center originators will reinvent themselves outside the mortage industry. The unfortunate long-term result is the old-timers will stay in, the younger generation will redefine themselves elsewhere and the average age of the industry will rise again. This natural culling will ironically yield a higher consumer satisfaction level and perception of higher professionalism among mortgage originators, as many of the order-taker types relying on a cram course for licensing and robotic scripting will no longer represent the industry.”

>>Daniel Jacobs, Managing Director at TruLoan Mortgage