Making lemonade out of lemons.

I came across an interesting article in American Banker recently.  You can see it here (warning:  registration required).

Needless to say, the headline says it all:  “End of Refi Boom Could Trigger Consolidation.”  In essence, U.S. Bank’s incoming mortgage president argues that purchase volume will not make up for the drop in refinancing, and that some lenders will have little choice but to quit the business or pair up with a competitor.

This confirms, to me anyway, what I’ve been saying for a few months now.  If you haven’t put a plan in place, it’s almost past time to get it done immediately.  So, how does one make lemonade from these potential lemons?

Branches.  Retail is going to be more important than ever in the next year.  And, as we know, retail involves human contact and face-to-face customer service.

Acquire purchase shops.    If building your retail infrastructure the old-fashioned way is not feasible, there may never be a better time to purchase any number of lending businesses.  The sooner, the better.

Special programs for Realtors.     I’m not suggesting anything illegal, here, of course.  But it’s time to renew acquaintances with this important segment to the transaction.  They may be a very real source of business in your key line of business for the next year or more.

Capture big purchase AEs.      Even though re-fi may dip for a bit, home purchases (and new construction) are increasing.  Again, you’ll need sold salespeople and customer contact to get into the game for jumbos and high-dollar mortgages.

The reverse mortgage business.     This one is tricky, and will require careful consideration.  We know that the reverse mortgage will likely face intense scrutiny from any number of regulators, so don’t even think about diving in without making the proper investment in a quality, compliant organization.  However, there is no doubt that the target market segment for this product is maturing as we speak.  It’s now or never, if this is the route you choose to take.

I’m already seeing a number of clients and colleagues taking some or all of the above steps.  They may not be the only path to continued success, but they reinforce my premise.  If you’ve been relying on refinance transactions for the past year or two, that ride is likely coming to an end.  Make your move now…or brace yourself.

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