Niches are important in a tightening market
The Mortgage Bankers Association (MBA) is forecasting that total residential mortgage originations will constrict
by $100 billion in 2018, to $1.61 trillion, down from an estimated $1.71 trillion in 2017. This decrease will be
caused by further shrinking of the refinance market, which MBA estimates will decline from an estimated $600
billion in 2017 to $424 billion in 2018.
In fact, the MBA forecast predicts purchase originations will increase by $80 billion
in 2018, which means the refinance share of total originations could drop from
35 percent in 2017 to just 26 percent in 2018. This percentage could continue shrinking
to 23 percent by 2020, according to the industry trade group.
What this means to the average mortgage originator in the U.S. over the next few
years is increased competition for purchase-mortgage business. Most loans in the
residential purchase market still fall into the Qualified Mortgage bucket — those
loans that get sold to Fannie Mae and Freddie Mac. That is where the stiffest
competition among mortgage professionals will be found. Savvy originators may
want to start looking at providing niche-loan programs, so they can reach borrowers
on the fringes where the competition is lighter.
This month, we present a number of articles about niche markets, programs and
borrowers to help our readers get a leg up on the competition. We start on Page
37 with Tim Ross of Ross Mortgage Corp., who discusses how to stand out from
the crowd with renovation loans. Next, turn to Page 61 to learn how to target an
intriguing new set of property investors in an article by Michael Miller of 5 Arch. Then
check out what Todd Jones of BBMC Mortgage has to say about serving veteran
borrowers. His article is on Page 58.
Continuing our focus on niches, we have an article by Susan Graham of Financial
Industry Computer Systems Inc. about how narrowing your focus can expand your
opportunities. Graham’s article begins on Page 93. On Page 72, Nathan Rufty of
Mortgage Marketing Pros provides some tips for cornering niche markets. Finally, turn to Page 44 for an article
by Cullen Canazares of Rental Kharma about how originators can help a growing segment of financial invisibles
to become borrower-ready.
In addition to niches, we present articles on an assortment of other mortgage topics this month. Britt Faircloth
of Wolters Kulwer has an important piece on how to navigate community-reinvestment and fair-lending
compliance rules. Turn to Page 78 for that article. Then, on Page 66, Thomas Cronkright II and Lawrence R.
Duthler, both of Sun Title and CertifID, present some tips for dealing with the menace of wire fraud at closings.
Finally, for some insights on the importance of a good operations team, read the article on Page 110 by Laura
Fellman of Churchill Mortgage.
All of this and more is inside our February issue. February also is the month we begin collecting data for our
annual rankings of the nation’s top-producing mortgage lenders. Top Mortgage Lenders 2017 will be published
in the June issue of Scotsman Guide. Lenders can begin submitting their 2017 loan data on Feb. 12 and the entry
period will close on March 16. For more information, go to scotsmanguide.com/toplenders.
From the Editor
By Will McDermott
Will McDermott is editor of Scotsman Guide Residential Edition.
Reach him at (800) 297-6061 or firstname.lastname@example.org.