How to Ready Your Business to Capture This Year’s Fluctuating Loan Volume
Whether the industry reaches a new equilibrium in 2024 or merely begins the journey to recovery is uncertain. Still, lenders can bank on one non-negotiable fact this year: Pent-up demand does exist in the market, with many potential home buyers viewing 2024 as the year they’ll take action. A recent report found that over 40% of Americans plan to buy a home this year. Meanwhile, a new survey from Fannie Mae shows that nearly a third of consumers believe borrowing costs for home loans will decline over the next 12 months, signifying an increasingly hopeful outlook.
“Heading into the first quarter of the year, the mortgage industry is marked by cautious optimism,” says Robert Ross, Maxwell Head of National Sales and a 23-year industry veteran. “Fed commentary points towards rate cuts, and reduced pressure on interest rates holds the chance to drive significant activity from sidelined home buyers.”
“Going into an election year, the incumbent administration may feel incentivized to boost economic numbers and consumer sentiment,” adds Bryan Traeger, Maxwell Managing Director of Corporate Development. “Usually, housing does not play an outsized role leading up to presidential elections. Because of the extreme challenges in 2023, however, we could see that change this year—ultimately influencing lower rates and borrowing costs.”
Capturing available demand with a competitive loan lineup
Whether pent-up demand translates into home buying activity will largely depend on rates, home prices, and available loan options. While lenders can’t control the first two factors, they can still proactively ready their operations for borrower business. Specifically, it’s vital to spend time now reviewing your loan offering menu and asking:
- Given current interest rates, are the loan products I provide enough to drive homeownership in the communities I serve?
- Which offerings do my competitors offer that meet the needs of my target markets?
- What can I feasibly add to my product lineup in the next 6 months that would change my ability to capture borrower business?
By understanding the lending needs in your locale, you’ll be able to build a lineup positioned to drive loan volume. In today’s rate environment, lenders may find opportunity in nontraditional offerings such as HELOCs, non-agency, and non-QM loans. Expanding into options that make sense in 2024’s market ensures your LOs are armed with strong options that result in more borrower interest.
Accessing talent experienced in a variety of products
Lenders also need to understand whether they can realistically stand up new loan offerings with their current in-house talent and operational capabilities. Niche loan products require specialized skill sets, and in today’s fast-moving market, it’s vital to ensure new offerings can be launched quickly and seamlessly, with minimal impact to back-end systems.
“The prevailing theme of 2024’s market will be fluctuations and non-linear recovery,” says Robert. “The lenders who succeed will be those who can scale up and down quickly, capturing volume as it reemerges in the market. However, that volume may or may not entail traditional GSE and government-eligible production. Lenders should be positioned to offer a broad product set and by doing so, will be well positioned to win market share from their competitors.”
Don’t have the resources needed to fulfill a wide array of loans? Luckily, you can lean on a strategic partner for help. Maxwell Capital provides expertise across conforming, jumbo, non-QM, conventional, non-agency, FHA, VA, USDA, and SOFR ARMs. That means you’ll have access to processors, underwriters, and closers highly experienced in these loan types, eliminating the learning curve and giving lenders instant, quality outcomes. Maxwell Private Label Origination, meanwhile, leverages multiple Maxwell solutions to provide all the infrastructure, expertise, and logistics you need to launch products quickly and painlessly.
Learn more in Maxwell’s new 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market
Want to get more advice on catering to home buyer needs and earning valuable borrower business this year? Download our new eBook to learn:
- The reasons why 2024’s path to market recovery won’t be linear, including how this year’s election could impact interest rates
- How to ready your lending business to capture intermittent volume as it reemerges without the burden of fixed costs
- Why access to real-time data insights will be a major differentiator in 2024—and how lenders can gain those analytics cost effectively
- The game-changing benefits of reinvesting in borrower relationships at a time when home buyers need lender support most
Download your copy to get exclusive advice from Maxwell leadership.
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