As we approach 2022, some headwinds confront the mortgage origination industry. For companies to survive and thrive, mortgage executives must focus on three primary factors: risk, strategy and efficiency.
In terms of managing financial risk, considerations include interest rate, market and reputation. Risk is becoming more pronounced as the Federal Reserve announced its plan to start tapering mortgage-backed security purchases by $5 billion, which will inevitably cause market volatility. In addition, the Mortgage Bankers Association forecasted that refinancing volume will decrease by nearly $1 trillion in 2022. Such a massive drop would create high-level risk for the financials of many originators. There are many mortgage firms that have prospered in 2020 and 2021 due to ultra-low rates.