The most wonderful time of the year, as the song would have us believe, comes to a close with Epiphany, the 12th day of Christmas, Jan. 6. I do hope everyone had a joyous holiday season, spending some relaxing time with family and friends.
The holiday season is winding down. So is the 24-month refinance market, the biggest of its kind in all of mortgage banking history. All good things must end. And this time, the most wonderful time of the year gives way to what, in the mortgage industry, could be the most awfullest time of the year.
No question about the fact that parodies are either a cheap, cynical trick or clever way of getting attention. I think there are a little of both here. So, with that in mind…
The Most Awfullest Time of the Year
There’ll be much laying offing
And pundrity scoffing
And lack of good cheer…
It’s the most awfullest time of the year
It’s never fun to be the bearer of bad tidings. Last fall I wrote a report, “Productivity, the One KPI to Rule Them All,” that among other things, states very plainly that the mortgage industry will go through a major downsizing during 2022. IF, and it’s always an IF, volume projections play out, then we are at least 30% over-staffed.
In sheer numbers this means there will likely be as many as 100,000 fewer mortgage professionals by the end of this year.
Oh, and the 100,000 applies just to lenders. It’s simple productivity math. Yet the downsizing has a ripple effect. Think technology and service providers, too — a smaller mortgage market affects everyone.
This is news, but it’s not newsworthy. There will be many articles, probably, about layoffs throughout 2022. If you’re surprised you’re not paying attention. Like I said, it is news – most everything is – but it’s not newsworthy. The mortgage industry has been going through these cycles since the 1980s. This time, though, the numbers will be bigger.
There will be far more newsworthy items than the employment size of the industry this year. How about we focus on big issues like affordable housing, lending to low- and moderate-income borrowers and helping first-time homebuyers achieve the American Dream in a market that’s nigh on unaffordable?
There’ll be plenty of racing
To people displacing
As loans disappear…
It’s the most awfullest time of the year!
Lest you think this is callous and I’m uncaring, consider this: early in my career I participated in laying off about 100 mortgage professionals as the December holidays began. It was neither fun nor funny. Quite the opposite, actually. The memory of it left an indelible mark on me and the way I worked with teammates from then on.
While it’s easy to say the industry will have 100,000 fewer employees at the end of 2022, it has to be just as easy to remember these are individual, talented people. And people are this industry’s most important and valuable asset.
My hope is that we’ll collectively be thoughtful in how we downsize, turning as many team members as possible toward the important work of originating loans and helping borrowers reach the closing table. Remember, we’re facing the largest cohort of first-time homebuyers in our history. They have plenty of information — thanks to the internet — though little actual knowledge.
Only people, NOT TECHNOLOGY — can fill the knowledge gap. Think about this as you build your staffing plan for 2022.
Dan Green is Principal at The BlackFin Group.
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