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The Mortgage Market is Shifting: Why You Should Adapt

By Tony Thompson

There are shifts happening in the mortgage marketplace, and they’re pretty seismic.

Consumers have shunned the olden ways of filling out paperwork and sending documents over fax in favor of using apps and e-signatures. Borrowers aren’t interested in working with the stuffy mortgage banker in a suit and tie; they want to do business with the in-touch lender who’s front and center, savvy and smart and doesn’t speak industry jargon.

Love it or hate it, the seas of change are roiling in our industry, and any business that hopes to remain relevant ought to adapt or risk slipping into extinction.

What does this change look like? Let’s start with the shifting demographics in housing.

Millennials Buy In

Despite the years-long chatter that millennials would eschew home buying to stay in apartments, young adults under the age of 36 are buying homes, and they’re doing it in quicker numbers than ever before. At 34 percent, millennials, the country’s largest generation, made up the largest group of homebuyers in 2016, according to the National Association of Realtors.

As rental rates continue to rise, millennials are taking cues from their parents and finding homes where they can settle down, start families and build equity. Skeptical? Then, take note of a study from Ellie Mae earlier this year which shows that 84 percent of the home loans closed at the beginning of 2017 went to mortgages for millennials.

Millennials aren’t just craving homes of their own—they’re on the cusp of emerging as the most influential force in the housing industry (TransUnion estimates that 17 million first-time homebuyers will enter the housing market in the next five years). That means endless opportunities await mortgage lenders that understand this generation’s wants and needs.

Spare the Trees

Another facet of change in the mortgage industry is technology. Gone are the days when borrowers were willing to trek to a bank, sit down with a loan officer and spend hours combing over a 500-page loan application.

Nowadays, in the age of Amazon, customers want speed and convenience. They want to apply for mortgages online, which is the same way they want to search for homes.

Savvy mortgage companies are partnering with Silicon Valley developers, tdevelop mobile apps and other products that make applying for a mortgage easier. They’re developing products that meet customers where they are, and make applying for a mortgage accessible and less of a hassle.

Diversify Your C-Suite

There’s also a shift happening in the workplace. More than ever before, diversity is essential to recruiting and retaining top talent. Plus, it helps lenders establish trust with consumers.

The Consumer Financial Protection Bureau earlier this year released a report examining why diversity in the mortgage industry is paramount. In part, it said that diversity creates space for perspectives that challenge “groupthink” among people with similar backgrounds. It helps companies tap into new market segments and develop innovative financial products that meet the needs of customers across multiple demographics.

And more diversity, at the executive and operations levels, lessens the chance a mortgage company will make tone-deaf statements that offend members of certain communities — a boon for any organization in the age of social media.

Company leaders must shift their thinking and stop treating diversity as an industry buzzword that indicts or perceive it as an excuse for employees to bring up uncomfortable topics. Diversity is simply good business.

Join the Shift

I know this because I’ve seen it work. Each year, NAMMBA (which stands for the National Association of Minority Mortgage Bankers of America) hosts a conference, dubbed “Connect,” to bring together some of the biggest and brightest players in the mortgage space. The two-day gathering in Atlanta helps mortgage bankers of all types learn from some of the best, and leverage networking opportunities to take their business to the next level.

NAMMBA’s upcoming conference next April features a who’s who of mortgage industry innovators. Nima Ghamsari, founder and CEO of a digital platform that helps lenders close loans faster, and Lisa Skeete Tatum, founder of a tech platform that helps women navigate their career paths.

The U.S. Census Bureau projects that by 2044, the nation’s minorities will become the majority, and rise to 56 percent of the total population by 2060, versus 38 percent in 2014. As the country’s racial makeup changes, so will the demographic makeup of homeownership.

The mortgage industry should embrace and adapt to that change.

Tony Thompson

Tony Thompson, CMB is the founder and CEO of the National Association of Minority Mortgage Bankers of America. He can be reached at Tony.Thompson@NAMMBA.org.


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