[New] 5 Loan Products That Will Make You Thrive In 2023

BY JOE CAMERIERI, SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

Given the current mortgage loan volume predictions we’ve been seeing the experts relay, it’s clear that you will either grow in 2023 or face the very real possibility of being forced out of the business. There simply won’t be enough new mortgages next year to satisfy the revenue demands of the lenders still in the business, to say nothing of

PEOPLE ON THE MOVE //

> EasyKnock, the first technologyenabled residential sale-leaseback platform, announces the hiring of Balaram Putta as the company’s chief technology officer.

> U.S. Mortgage Insurers announced that Seth Appleton, the president of the Mortgage Industry Standards Maintenance Organization (MISMO), will serve as the association’s new president.

meeting their growth objectives. To make matters worse, many lenders are still paying the high overhead expenses of overcapacity.

But in every market, even those that seem the most distressed, there will be leaders who rise above the rest and grow in spite of everything.

To win in 2023, lenders will have to do a number of things right, including:

• Right-sizing their organizations to staff

> Planet Home Lending, a national mortgage lender and servicer, has added a new team in Woodbury, N.Y. It will be led by Regional Vice Presidents Jason Morano and Chris Wubbenhorst. appropriately;

• Streamlining their operations for efficiency to do more with less;

• Refocusing their process for better borrower and employee satisfaction;

• Reducing overall origination costs by better leveraging their tech stacks;

• Making any required corrections to their existing compensation plans;

• Closing every loan faster.

But none of those will matter if lenders don’t do a good job of getting new loan applications into their pipelines.

Some of that will depend on good marketing to the business referral partners, homeowners, and new homebuyers living in the markets they serve. But a lot of it will depend upon offering the loan products that borrowers need now.

If lenders can’t meet the actual needs of the borrowers their business referral partners bring them in 2023, they won’t grow. They may not even survive.

Here are five loan products — in addition to the plain vanilla agency paper that everyone sells — that should be on every lender’s menu going into the new year.

NON-QUALIFIED MORTGAGES (NON-QM)

Rising interest rates and high home values have left many borrowers feeling priced out of the market. When borrowers see the monthly payments that result from agency loans, they feel homes are too expensive. That’s not really the case. At the same time, inflation has caused more consumers to fall back on credit cards, which reduces their credit scores. Product innovation, predominantly in Non-QM lending, can help both types of borrowers and the lenders who serve them.

In fact, Non-QM lenders are finding strong demand for their products right now. We work with hundreds of lenders who originate loans for their own portfolios, as well as some of the largest independent portfolio lenders in the country, and they are still aggressively promoting Non-QM loans to their applicants and serving more borrowers.

Some have put the size of the total addressable market for Non-QM lending somewhere between $175 billion and $200 billion. That might be on the low side.

Inflation aside, a strong job market is keeping consumers optimistic. We’re seeing consumer spending increase, which could lead to more demand for HELOCS in the future.

While loan balances are lower and few borrowers traditionally tap their entire line of credit, it’s a loan product we expect to see borrowers requesting more often next year.

Banks used to predominantly deliver this product, but there are options for IMBs to get into this mortgage segment as well.

Reverse Mortgage Loans

After years of consumer education by a number of large players in the reverse

Home Equity Lines Of Credit

Cash-out refinances don’t make sense for most existing homeowners today, and they won’t for some time. This doesn’t mean consumers won’t have a need to tap their existing home equity.

The Home Equity Line of Credit (HELOC) is a good solution if the lender can make qualification easy and funding quick.

mortgage space, we’re beginning to see more interest from aging borrowers for these loan products. People seem to understand what this loan product is for and how to use it.

Higher interest rates make these loans less attractive to some borrowers because it limits the amount of equity

> Ncontracts, a provider of integrated compliance and risk management solutions to the financial industry, announced the promotion of Cathy Guthrie to chief human resource officer.

> Trinity Oaks Mortgage announced the promotion of John Picinic from sales manager to executive vice president, production.

> Sales Boomerang and Mortgage Coach announced the appointment of Shelli Holland to the role of chief people officer.

> Churchill Mortgage has hired Kisha Weir as VP of Sales for the Pacific Northwest region.