| With another year behind us and the spring market soon upon us, Banker & Tradesman asked industry experts for their thoughts and predictions about the future of the mortgage industry in 2015.
“2014 was obviously a very active year with lots of liquidity in the market. Life insurance companies, CMBS shops and banks were all looking to deploy capital. Fannie Mae and Freddie Mac were very competitive on multifamily. Life companies were looking for stable investments such as grocery-anchored shopping centers and multifamily at lower leverage levels. Banks were trying to put it out in office properties. 2015 will be a slightly more active year. We think rates are going to stay low and we’ll have a fair amount of rollover from 2005 and 2006. That’s going to provide a lot of activity for lenders.”
— Porter Terry, director, HFF
John Brodrick
“Consumer confidence is higher than a year ago, which should be good news for improved home sales. First-time buyers feel more secure about their employment and home sellers are more confident about their ability to sell. Last year at this time we said mortgage rates would be higher going into 2015, yet they are lower and it appears, at least short term, may not have hit bottom. It is a great time to buy or sell. Implementing the TILA-RESPA integrated disclosure and delivery requirements, effective Aug. 1, will be 2015’s biggest challenge for mortgage lenders. Consolidation of lenders will continue, creating good opportunity for those who stick it out.”
— John Brodrick, senior vice president, mortgage lending director, Eastern Bank
Andrew Gnazzo
“We primarily do multifamily and agency debt, and last year was incredibly busy. We did roughly $350 million to $400 million in the Greater Boston market. I expect this year to be similar; the 10-year treasury is in the 1.9 range, which is amazing. We’ve done deals with cap rates from the mid-4s to maybe 6 percent. Boston is still considered one of the darling markets in the industry, even with the new planned units coming out of the ground. It’s becoming increasingly competitive just like it was pre-recession, with tons of capital and tons of providers, so we hope to keep our market share where it is.”
— Andrew Gnazzo, managing director, Walker & Dunlop
Glen White
“We are cautiously optimistic that 2015 will be a good year for residential lending in our market area, south of Boston. Most economic indicators are reporting favorably for it. Consumer spending is picking up, energy prices are down, employment numbers have improved. As long as the rate environment remains consistent, I anticipate an active lending year ahead.”
— Glen White, CEO, Mutual Bank
James Frischling
“The Federal Housing Administration recently announced it will reduce the annual premiums new borrowers pay by 50 basis points. When you combine this move with the recent lowering of down payments required by Fannie Mae and Freddie Mac, you quickly see that the government isn’t reducing its current dominant place in the mortgage market; it is expanding it. Both market professionals and government officials claim to agree and state publicly that the government’s market share needs to shrink and private capital needs to return to the housing market. Saying one thing and doing another is called hypocrisy. The actions of the FHA and the GSEs suggest that the government feels the housing market is too important to be left in the hands of the private sector. As the current U.S. homeownership rate is at its lowest level in almost 20 years, maybe it’s time to rethink that.”
— James Frischling, president, NewOak
Jack McGeorge
“Needham Bank projects a very positive outlook for our mortgage market in 2015. Our bank works very closely with key players in the building and construction industries and with leading real estate brokers and, almost without exception, they remain bullish. Given improved employment numbers, especially among those in the critical 25–34 age demographic, new household growth is on the upswing. Additional experienced loan officers have been hired in the past few years to augment existing staff. We also recently opened a new, 7,500 square-foot loan center to allow us to meet the rising demand. All in all, we expect 2015 to be a very good year.”
— Jack McGeorge, chairman and CEO, Needham Bank
