He reveals why many companies failed during the pandemic and why ACC didn't
Many companies did not survive when the housing market went from boom to bust, and they are those who failed to innovate and pivot in preparation for downturns, ACC Mortgage president Robert Senko said.
Senko believes that this is often due to “ego-driven” leadership that does not plan for the worst-case scenario. “You hope for the best and prepare for the worst,” he told Mortgage Professional America in an exclusive interview. “I don’t think a lot of companies do that.
“Unlike a lot of my competitors who had a pure securitization outlet, we had a multipronged approach in that we worked with securitizers as well as portfolio balance sheet leaders for funding, and that allowed us to keep our legs during the early days of COVID when a lot of people didn’t or couldn’t. A lot of companies shuttered staffing, and we were able to grow. Coming out of COVID, we elevated through those times. The way we hedged and locked our loans, I wasn’t gambling with the markets.”
Even though ACC Mortgage has risen above the pandemic’s challenges, it has not lowered its guard in anticipation of difficult times ahead.
“There are several forces at work to make the near term very challenging,” Senko said. “First, the cost of borrowing has increased, so the purchasing power of the consumer has been reduced. That means home prices must come down in order for borrowers to be qualified to buy the home.
“The stock market has taken a hit, so folks can’t just sell stocks to afford the home. Double whammy for the market. On a capital market basis, the folks who buy our paper are not willing to pay a premium until the Fed stops raising rates. The Fed has been very clear that they are raising rates to 4.5%, and then they will be ‘neutral,’ meaning they do not plan to raise or cut rates.
Read more: ACC Mortgage thrives with non-QM lending
“At that point, the market will be able to price our paper appropriately, and firms should be able to make normal income on a per-loan basis. Inflation should be greatly reduced from [current] levels, and if the job market doesn’t get hurt too bad, consumers will be able to buy homes at a reduced price in a higher rate environment. Barring any black swan event, assuming Congress becomes split, then the world and economy should operate on a normal basis.”
Having weathered a lot in its 23-year history, Senko is confident ACC Mortgage is positioned to successfully navigate this season as well.
“Although I operate from a very cautious perspective, fundamentally, I am an optimist as well as a realist. You have peaks and valleys, and [we are] coming off an incredible peak,” he said. “Right now, we are going into a valley, but the optimist in me always believes I can improve during the downtime to prepare for the next peak.”
