Have you ever heard an economist say, "On the one hand—the economy is the best it has ever been—but on the other hand……" Let’s give some serious thought to requiring economists to speak with one arm tied behind their backs.
Then there is the economist who was asked what he thought the future of the economy would be? He replied, "One things for sure—history will repeat itself."
I recently attended the Mississippi Annual Convention of Mortgage Bankers and heard David Berson, Chief Economist for FannieMae talk about the REVISED forecast for the housing market and mortgage finance markets.
The original forecast was that purchase transactions would remain steady—but loan origination activity would DECREASE by over 30%.
But, "on the other hand…" FannieMae is saying that loan originations will INCREASE approximately 19% (from 2002 levels) to a total of $3.2 Trillion in mortgage loans for 2003.
The prediction for 2004 is another story. Mr. Berson said that loan originations would decrease from the all time high of $3.2 Trillion to $1.68 Trillion—about a 50% decline. The good news is that existing and new home sales will continue to increase as refinance business goes away.
The other good news is that you have another year to formulate a sales and marketing game plan. The bad news is the same—you only have a year to formulate another game plan, and must attempt to do so between loan applications.
For what it’s worth, my advice is that you enjoy this great mortgage business of ours but sock some of your money away for a rainy day. In a recent online seminar featuring Sue Woodard, she asked attendees to write down their income for 2002. Now, decrease that by 50% (based upon the predictions) and stare at that income number. Can you afford to live on that amount of income in 2004? History will repeat itself.
Start now to develop purchase business (both new and existing homes) by embracing ONE marketing idea at a time. It does not have to be HUGE! Just take baby steps. Set up one corporate account per month. Sign up one union account every two months. Give a first-time homebuyer seminar every now and then.
Whether or not you believe the numbers mentioned above is irrelevant. I hope I got you thinking about your future in the mortgage business. Just remember, "History does repeat itself".
Copyright, 2003, LoanOfficerMagazine.com
