Staff retention, volume fluctuation among top lender worries for 2021

With most expecting this year’s lending volume to come in lower than 2020’s record-breaking totals, lenders are recalibrating in a number of areas to get ready for whatever comes next, according to a survey from The Mortgage Collaborative.

An 88.2% share of 598 lending executives surveyed said retaining staff was either very important or critically important for this year, according to The Mortgage Collaborative’s inaugural Pulse of the Mortgage Industry report. Regarding their biggest concerns this year, about 86.2% said enhancing customer experience at the point of sale and 84.9% said modernizing loan originating processes to insulate against volume fluctuations.

These top three issues all align with the industry’s push for increased efficiencies while avoiding the typical ‘hire-and-fire’ cycle after origination highs of the past. Companies are more concerned with the human impact of that strategy, as well as the operational and financial effects, according to TMC president and COO Rich Swerbinsky.

“Back in February 2019, margin compression had lenders wishing they had tightened up their staffing numbers earlier,” Swerbinsky said in a statement to National Mortgage News. “Nearly 18 months later, many of those same lenders could not hire fast enough to manage the sheer volume of loans coming in their doors. For many, the more extreme peaks and valleys of late have brought the need to modernize operations via technology into sharper relief.”

Both the survey results and anecdotes from the San Diego-based independent network of lenders show its members are more committed than ever to software investments for improving operational efficiency. Especially as refinance activity wanes in the industry’s latest “roller coaster,” mortgage companies want to minimize the manual back office originating processes, the report said.

Notably, as home prices and construction costs keep surging, lenders expect that jumbo lending will grow, taking on a larger part of 2021’s overall mortgage volume. A 69.1% share said an increase in jumbo loans is a top concern as more borrowers will have to go above conforming loan limits. However, the heft of these loans leaves end-buyer availability and appetite in question.

“Demand usually exceeds supply in this regard even in the best of times, and with the current interest rate environment, investors may be even more reluctant to add fixed-rate jumbo loans to their balance sheets,” Swerbinsky said.