Hello, LOs!
During the mortgage boom of 2020 and 2021, my inbox was flooded with pitches from mortgage tech companies. Every day there seemed to be a new LOS, CRM, POS, lead generation tool or AI-fueled underwriting program. And that's to say nothing of product updates from the behemoths in the space, Black Knight, ICE Mortgage Technology, Blend, etc. Lots of capital made its way to companies that promised to make the cumbersome and antiquated mortgage process more efficient and less error-prone.
But someone eventually takes the punch bowl away.
With the rapid rate increase, the solutions companies that are enjoined to lenders are also suffering, as Connie Kim reports in this excellent HW+ story.
Due to the combination of tight housing inventory, reduction in refis and surging mortgage rates, observers anticipate consolidation. In short, the money is running out, and layoffs at mortgage tech companies appear inevitable, along with other cost-saving measures, including diminished investments in technology.
"Rising tide raises all ships, but subsequently lowering tides drop off ships," said John Hudson, executive vice president at Mortgage Financial Services. "With less volume out there, it's only a matter of numbers and math. Less loans equals less revenue across the board. You're going to see some that'll survive and some will simply not make it."
LOs – I'd like to hear which mortgage solutions company's tools/products really make your life easier. Do you think this rough patch for the industry will result in less innovation? Share your thoughts anonymously at james@hwmedia.com.
James Kleimann
Managing Editor, HW Media
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