Through 2020, the housing market proved to be a rare bright spot for the US economy. While other sectors including the labor market and service industry were affected, low mortgage rates fueled strong buying home activity.
It is expected that the housing market will get stronger through 2021 as the economy recovers from the pandemic-driven recession, while mortgage rates remain historically low. According to brokerage firm Redfin, the housing market will continue to be buoyed by historically low mortgage rates which will rise slowly from 2.7% to around 3%. An average of forecasts from Fannie Mae (FNMA), Freddie Mac (FMCC) and the National Association of Realtors and the Mortgage Bankers Association too indicates that the 30-year mortgage rate is expected to average 3.075% in 2021, down from 3.125% in 2020.
As home prices will slow down, home sales are expected to pick up. As many as 6.323 million existing homes are expected to be sold in 2021, a 4.7% increase over 2020, according to an average of forecasts from Fannie, Freddie, NAR, and MBA.
This means lenders whose business has been flourishing through 2020 will continue to thrive even in 2021. However, there are a number of factors that will now have to be considered while preparing to meet the rising volumes of 2021.
Getting Over the Holiday Season
The holiday season may be over, but employees, staff, and people, in general, may take some time to get back into the grind. There may be a gradual downtick in the market that begins at the start of the holiday season but can extend into the early months of the following year.
It is necessary to first get over the holiday season and prepare strategies to restart work that may have slowed down. Considering volumes are likely to rise, it’s best for lenders to prepare their teams to take on additional work with a refreshed mind.
Boosting Productivity Amid the Remote Working
In 2020, in many states, as lockdown orders came suddenly, mortgage companies too scrambled to set up remote working for their employees. While in the first month of the pandemic, it was difficult to adapt to the scenario, businesses soon acclimatized to this remote work experiment. In 2021, many are altering their long-term plans to accommodate this way of working with remote work getting better for the vast majority of companies.
The focus will now be on how to boost productivity if this situation continues even in 2021. Mortgage industry professionals will have to be ready to exploit the benefits of an all-virtual workplace and seek out new technology. While some have already done that, others have to work towards upgrading their tech—in the office, not just at the point of sale. Companies will have to ensure that they deploy robust mortgage automation solutions to support their borrowers, sellers, and support staff.
Besides, some staff members may not feel comfortable or safe yet to get back to working from an office environment. Companies will have to be considerate towards such staff as well.
Exploring Beneficial Partnerships
Dealing with high volumes amidst staff restrictions and the remote working situation may be tough. To manage this, lenders can consider partnering with niche players or service partners who can help with the right kind of technology and infrastructure to improve operational efficiencies, save time, and reduce costs. Such companies offer requisite support to lenders to handle the high purchase and refinance volumes.
By associating with service partners, lenders can also seek help in mortgage processing which consists of complex tasks. While the service partner’s expert team can manage tasks that involve time and effort, lenders team can focus on new business development or other areas like compliance risk, devising new product strategies, or meeting the core objectives of the business. This will in turn lead to the optimization of profits and growth.
Considering ODCs To Scale Up
Another way for lenders to meet high volumes in 2021 would be to associate with partners that offer Offshore Delivery Centers (ODC) – a preferred option for many lenders today. ODCs are like extended facilities of the client’s operating environment that bring in accountability, transparency, and a governance model that gives them greater control over the processes followed.
ODC setups that pan across a host of geographical locations and demographics have proved to be a strong support system for lenders. Through a portfolio of specially designed industry-specific solutions, these domain-sensitized ODCs have guided clients to improve their business performance during tough times.
Companies like Visionet can help lenders manage high origination volumes in 2021. As a bankable partner that offers clients a unique combination of technology, digital operations, and proprietary mortgage technology products, Visionet can help improve workflows and streamline processes while decreasing overhead costs. If you wish to know more about Visionet’s products and services or wish to discuss business operations further, you can connect with us on https://bfsi.visionet.com/about-us/
Visionet is a leading digital technology solutions provider for the BFSI and Residential Mortgage industry. We are passionate to deliver exceptional business outcomes to our clients leveraging deep industry expertise and proprietary mortgage technology products. We post our views on mortgage technology and industry updates through this blog.