Know Your Marketplace Dos and Don’ts Setting

Yourself Up for Success in 2023

By Jeff Vossen TruHome Solutions

None of us know for sure what the future holds. Based on current market conditions, historic patterns, and expert analysis, we feel confident that the 2023 mortgage market may be more challenging than in recent years. But don’t panic — prepare.

Simply understanding what’s likely to happen, and why, is the first and most important thing you can do to begin planning for next year. Once you know what’s on the horizon, you can make more informed decisions on how to operate in the near future. There are strategies you can implement in advance of even the most challenging years to help strengthen your organization and prepare for anticipated challenges and opportunities.

Historically, credit unions hold only about 7% to 8% of the total mortgage market share. Especially in a time of slow originations, like we’re predicting for 2023, that low market share is a massive opportunity. Because high- interest rates are discouraging home buyers away from traditional mortgages, credit unions have the chance to build on their existing relationships with members to maintain and increase their current market share.

Here are some “dos” and “don’ts” we’re recommending for our credit union partners as they plan their 2023 strategies:

DO continue to expand your product and offering set. If you have room on your balance sheet, you have the opportunity to increase your market share significantly in this type of environment, by enhancing existing products (like adjustable-rate mortgages, or ARMs) rather than putting undue focus on traditional 20- to 30-year fixed-rate mortgages.

DO utilize your balance sheet to gain market share and sell commodities into a secondary market. There’s a real opportunity to create something that sets you apart in this market. Consider your advantages: Most independent mortgage companies don’t have a balance sheet they can utilize to lend to consumers.

DO consider moving to a variable cost structure in reduced production. You can do this by partnering with a credit union service organization (CUSO) so you’re always appropriately staffed. This way, you’ll always have the resources you need to handle an increased volume, but you’ll avoid having to go through unnecessary uncertainty and staff layoffs in the case of a downturn.

DO utilize a data provider to help analyze your situation. Utilizing a data provider can be a great way to locate marketing opportunities within your current memberships, and proactively generate prospective marketing leads.

DON’T tie up your balance sheet with loans that you can easily sell off into the secondary market. Despite slow originations predicted well into 2023, there’s a lot of opportunity ahead. We’re preparing a wide variety of actionable tactics for our credit union partners and look forward to seeing how they grow and maintain their current market share.

Jeff Vossen is SVP of Mortgage Originations & Operations at TruHome Solutions. Jeff manages the direction of all mortgage origination and operational functions for TruHome, including originations, processing, underwriting, closing and mortgage solutions.

Jeff Vossen