The mortgage banking business is stronger than it seems despite the current effects on the market, with plenty of ability for growth remaining, according to American Banker. Data from the STRATMOR Group is key evidence of this shift - while banks currently believe that rising interest rates have stifled their opportunities for revenue growth, a well-structured bank should actually be able to offset other declines through their top-line revenue. Banks should be able to deliver new mortgages to between 1 and 2 percent of their customer households every year, for instance, which can lead to more than 1,000 new loan originations annually, boding well for hiring growth in the future.
In addition, originating loans for current customers can increasingly be recognized as less expensive than for new ones, the group's information shows, as the cost of marketing and commissions are normally lower than average. Based off the initial estimates of household relationships that can be improved upon, midsize banks can find as much as $3,000 per loan in pre-tax income. Over a period of time, that can result in as much as $6 million in net production income, generating return on required equity of more than 250 percent - a goal any bank would love to hit. With the financial freedom successes like these would provide, future hiring may be able to turn around from current patterns in the near future.
The news source also states that focusing on mortgages, even in times of financial uncertainty, should remain a point of emphasis for bankers because of their value to consumers. As the average person can often consider their side of the deal to be one of their most important financial decisions, it's recommended that working with the consumer whenever possible can help fight loss of revenue in the future - refinancing is vastly preferable to a worker taking their money to a competitor. While every bank is different, keeping focus of consumer needs is an important factor in the business that needs to be emphasized whenever possible.
Mortgage Bankers Association celebrates hundredth anniversary
Refocusing on these efforts should only become a more focal aspect of production in light of the Mortgage Bankers Association's recent celebration of its hundredth anniversary, according to National Mortgage Professional. With the heritage and history of the association through the events of the last century, keeping the efforts of past bankers should remain in trying to help as many customers as possible.
Now representing more than 350,000 workers from 3,000 organizations, a sharp increase from its original 67 companies, leaders of the industry have referred to the industry as the "gatekeeper" of America, helping protect the country through whatever turmoil it undergoes. Keeping an eye on the economy remains an important aspect of the industry, according to leaders from past years - especially in today's climate and as the industry continues to evolve. From just the 1970s to today, according to former Mortgage Bankers Association chair John Robbins, regulation has taken a big part of the industry's control, while federal programs and state-to-state oversight were not nearly what they are today.
Keeping this in mind, the MBA and the workers it represents can continue to blaze a trail for the industry by standing up for their customers, as they remain the most powerful voice for real estate purchasers when pertaining to the government. From the largest business to the smallest individual worker, they can represent a major source of growth for the industry in the future. Workers who have the ability to empathize will bode well in future hiring efforts.
At the recent Mortgage Bankers Association Annual Convention, a variety of panel discussions were held that reinforce the importance of the MBA. From updates on agency work and the government's role in the financing of housing to the history of mortgage banking and what can be learned from the positive and negative effects of the industry's past, these discussions helped to better inform the industry as a whole and in future hiring, according to C-Span.