FHA, VA and USDA loans are among the options available for borrowers
In a downshifted market, there is ample opportunity to refine one’s processes, and even some who have been able to capitalize, according to a seasoned mortgage veteran.
Kristin O’Neil (pictured), senior loan officer at Open Door Lending, spoke to Mortgage Professional America during the recent FUSE conference organized by the Association of Independent Mortgage Experts that took place in Las Vegas. Having started her career in 2008 – the year of the Great Recession – she knows of downward cycles.
The current challenges in the industry – marked by higher mortgage rates against a backdrop of inflation – present an opportunity to fine-tune processes, she said.
It’s been a most challenging year
“The year 2023 has definitely been a challenging year,” she told MPA. “I started in mortgages in 2008, so I definitely have seen the ups and downs. Something about this year felt different but I think there is a lot of positive takeaways. In this slow season, it allows people to get back to basics. I’ve seen so many brokers – myself included – start to fine-tune their processes and figure out how to elevate the client experience because they have the time to do it.”
A good time for first-time homebuyers
Due to the challenging times, she noted, some first-time homebuyers are having an easier time purchasing homes.
“We would love if the rates would go down sooner than later,” she began. “But I think there are some positive takeaways – a lot of opportunities for first-time homebuyers. In 2022, it was very difficult for somebody who had an FHA, or VA, or USDA loan to have their offer accepted, and we’re seeing those offers being accepted now. So I think there is a lot more opportunity, but especially for first-time homebuyers right now in the current market.”
Despite the higher mortgage rates currently hovering at around 8%, O’Neil believes this is a good time for first-time homebuyers to purchase a house.
“Right now, affordability is a problem as a whole,” she said. “Home prices are increasing, and the rising interest rates are exacerbating that problem. But I do think that we’re probably going to see an increase in sales prices once those rates come down because there is going to be much more competition. For some people it’s not the best time. But if buying a home is a dream of yours and you can make those numbers work now, there is a lot of opportunity.”
One sobering statistic predicts that the number of loan originators will be reduced by half by year’s end when compared to last year. The exodus will benefit those still left in the market, O’Neil said.
It’s a good time to pick up market share
“I’ve seen the data, and hate to see so many loan originators being forced to other career options,” she said. “But I do think it’s a really good opportunity to gain market share. Many originators who worked previously for banks or retail lenders are really starting to take inventory of their company overhead – unnecessary levels of management, expensive president club trips, expensive office overhead, and the list goes on.
“Unfortunately, it increases the bottom dollar of the consumer. I think in a market where every penny counts, many customers are turning to mortgage brokers.”
Advice to newcomers
O’Neil provided advice to those just entering the industry. “Hard work is always the answer,” she said. “So no matter what the market is, if you outwork your competition, you will do well. I think using some of these slow times to get involved in your community and really give back is going to make a world of difference. Take the time to really fine-tune your process and make the best client experience possible so that when the market does turn, you’ve set yourself up for success and you’re ready and able to take on extra business.”
O’Neil serves as one of two so-called state captains for AIME, on the lookout for legislative matters affecting brokers for her state of Virginia. She suggested the role was an offshoot of the resources AIME has to offer.
“I honestly can’t express how grateful I am to AIME,” she said. “They’ve created this community we’ve never really had as brokers before. We’ve always operated on our own separate island and never had the opportunity to collaborate.”
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