You’ve heard me on this theme before, but I think it’s more relevant than ever these days.

With change, comes opportunity.

Yes, QM has slowed the flow of origination a bit.  You could also argue that tighter credit, a bad winter, the return of the purchase market or even the Abominable Snowman have had some hand in the drop in originations.  Whatever it is, there’s fewer loans being sold.

Yes, there’s less capital to go around right now.  Secondary investors are raising their standards, too.

Yes, the cost of originating a mortgage has gone up dramatically on a per transaction basis.

Discouraging?  Perhaps.  But this is also a fairly natural cycle in any market.  We just haven’t really seen it in awhile.

Trust me.  Plenty of players will give up and leave the market.  This has happened before.  Consolidation is the market’s way of correcting itself if we allow it to.  Lenders will be cautious to a fault with their underwriting, going way beyond what the CFPB intended when it comes to being selective.

But I can promise you that profit (or the lack thereof) will win the day sooner or later.  As our industry gets used to and even, dare I say, comfortable with the new regulatory standards, we’ll figure out how to lend to more consumers in a more efficient manner.

And it’s the people and firms that figure out how to do that which will lead the market.

Are you one of those leaders?  Or are you waiting for someone to eat your lunch competitively?  That’s a decision we all have to make right now…