Staying In Front of Mortgage Trends

In many ways, 2010 is going to be a dramatically different year. The recession which lasted throughout the first half presented a unique set of challenges for mortgage lenders, but this year’s hangover may yet produce a more complicated collection of conditions in which credit unions must compete.


In many ways, 2010 is will be a different year than 2009.  The recession, which lasted throughout the first half of 2009, presented a unique set of challenges for mortgage lenders. This year’s hangover may yet produce a more complicated collection of conditions.  The near-overwhelming set of trends and events slated for 2010 are dizzying.  The ultimate solution for credit unions will be to examine each trend on its own and then consider the trends’ impact on overall mortgage lending strategy.

The Mortgage Bankers Association is projecting approximately $2.1 billion in total mortgage volume in 2009.  For 2010, the MBA expects just shy of $1.3 billion, a 40% decline.  This decline will be driven by a project 63% drop in refinance volume from 2009 to 2010. 

How will your credit union make up this volume?

JP Morgan Chase made an announcement in November that is still resonating in the media.  By the end of this year, it said it will hire 1,200 mortgage loan officers.  Further, it announced that it has unfrozen salaries.  Other financial institutions, such as Bank of America, have made similar announcements. Competition for mortgage business and talented loan officers has returned.

How are you responding to increased competition in your market?

The Federal Reserve is planning to stop buying mortgage-backed securities in March.  HSH Associates projects the Fed’s purchase program depressed fixed rates by up to 75 bps.  The uncertainty created by the Fed’s departure—in addition to the direct impact of the departure itself if another investor does not step in—will create upward pressure on mortgage rates.

How will this timing influence your strategy of buying versus selling mortgages?

The homebuyer tax credit is set to expire in April.  Lenders are telling prospective home buyers to submit their applications now to ensure they can take advantage of the credit before its April 30 expiration.

What other incentives could benefit your prospective home-buying members?

Ultimately, credit unions must diligently track and adapt to evolving market trends.  Further, they need to be proactive in their review of their mortgage programs and update their approach to mortgage lending.  To learn more about upcoming trends in 2010 and how credit unions are preparing, join us for our live webinar Build Mortgage Market Share in 2010 on January 28, 2010 at 2 p.m. (EST).




Jan. 27, 2010



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