With rumors flying about the potential exit of Bank of America from the correspondent lender channel, Nationstar Mortgage may be the leading candidate to acquire the business line from the giant bank, according to Rob Chrisman, contributing editor of Mortgage News Daily.
Chrisman spoke today during a keynote address at the New England Mortgage Banker’s conference.
Though earlier word indicated interest on the part of several real estate investment trusts in that piece of BoA’s business, rumors of impending regulation of REITs have sent stock prices plunging for that sector, and Nationstar is rumored to be in the process of performing due diligence.
But despite the big gap the departure of BoA would leave, that may not be such a bad thing for the industry, Chrisman said. He pointed out that BoA’s departure earlier this year from the wholesale channel opened the door to several smaller players, increasing competition in the space to the benefit of brokers.
Chrisman made the remarks during a question and answer session following his speech. He discussed the challenges of the current marketplace, citing email after email from loan officers, company owners, managers, and others looking for a snapshot of the state of the industry. While certain bright spots exist – including record-low interest rates – a more realistic assessment of the market indicates it may take until 2014 until we see true recovery and stabilization, he said.
The most successful loan officers are those who are adapting to the current conditions by anticipating problems and planning ahead to counter them. He recommended pricing out more than one tier of loans in case the appraisal comes in low and seeing whether PMI might bridge that gap, and if so which lenders or investors might be willing to go that route.
While there may be plenty of rough times still ahead, he suggested that current conditions are proving a boon for smaller, more regional lenders, including credit unions.
"Look around [the hall] and see who’s still in business — you know most of the people that you see. And that’s a symptom of the general environment," he said. "People who are left in the business are the ones who are really here to help people."
But the renewed importance of smaller, regional companies and their new advantages may also impact trade organizations, Chrisman said. The interest of regional and statewide groups and national organizations may diverge, particularly in an environment where the federal regulatory picture remains unclear. He said he had spoken to at least one CEO of a regional lender earlier this year who was considering withdrawing from the Mortgage Bankers Association, citing that as a symptom of a developing schism.
