In a recent interview published by floridarealtors.org, Jane Fraser, CEO of CitiMortgage in St. Louis, revealed some insight into the current state of the refinancing world and how it affects the refocusing of the mortgage industry. Just over a year ago refinancing accounted for approximately 78% of applications at Citigroup. Now, as the market has reshaped, this number has dropped to 61%. As a result of declining refinancing applications, many major organizations have had to enact layoffs, including big players such as Bank of America, Nationstar Mortgage and Wells Fargo.
With less of a demand for refinancing, mortgage companies are now refocusing and reengaging on residential mortgages for home purchases. For many companies this means new innovation, research, and partnerships with real estate agents and homebuilders. This also changes company’s views on the ease and happiness of the end user, including developing buyer and seller friendly technologies such as digital vaults for safe document keeping and apps that allow customers to track their mortgage application in real time.
While the switch from refinancing to home purchases has made some major waves for large companies (USA Mortgage reporting a 75/25 ratio in favor of refinancing last year, which has now completely flipped to a 25/75 ratio in favor of home purchases) there could be a silver lining in this for buyers, sellers and real estate teams. What does this mean for you? While refinancing may be grinding to a snails pace, this means that mortgaging is on the rise and so are home sales. With companies relocating their energy towards a mortgage friendly market to keep their business booming, promises of better partnerships with realtors and smoother mortgage processing for buyers and sellers could be on the horizon.
The world of mortgages may be turning on its head, but dedicated companies understand that new thinking will help them succeed and new thinking will lead to a market more oriented to buyers and sellers. As Gary Douglass, CEO of Pulaski’s Bank put it, “You can’t shrink your way to success in this business”. So, let’s prepare for and celebrate mortgage companies rising to the occasion with new innovation.