Companies are bundling home-buying services, including mortgages.are introducing more-efficient digital platforms. Next-generation “subservicers” 3 A subservicer is a qualified outsourcing partner that does not own the right to perform servicing but that performs servicing (including all administrative-, compliance-, and financial-servicing activities) on behalf of a master servicer for a monthly per-loan fee.Nonbank lenders continue to grow market share.
Third-party technology and data providers are streamlining more parts of the mortgage process.
This article examines five dynamic trends that are reshaping the mortgage industry and that are relevant to investors in this sector: Investors can facilitate further improvements at the point of origination, processing, underwriting, and loan servicing, as well as expand consumer access to home-financing and home-buying services. Meanwhile, the mortgage industry has been gradually adopting technology to streamline the front-to-back process of getting a mortgage, with the aim of making the consumer experience smoother and faster. 2 “Quarterly mortgage originations estimates,” Mortgage Bankers Association, October 2021, mba.org. which is at leastĤ0 percent higher than average annual originations between 20. According to a recent report from the Mortgage Bankers Association, the industry is expected to originate more than $2.5 trillion for each of the next three years, 1 “MBA mortgage finance forecast,” Mortgage Bankers Association, November 22, 2021, mba.org. Although a rise in rates would cool refinance activity, banks, nonbank lenders, and mortgage industry investors are likely to continue seeing strong demand from the purchase market. Consumer demand for mortgages in the United States has skyrocketed, due to a surge in home buying during the COVID-19 pandemic and as a result of low interest rates that have made refinancing attractive over the past two years.
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