As mortgage rates climb and the refinance boom comes to a close, the origination sector is in flux.
Last week, mortgage applications declined 8 percent, according to the Mortgage Bankers Association’s Weekly Mortgage Application Survey, while the average interest rate for a fixed-rate, 30-year mortgage rose from 4.56 percent to 4.68 percent.
Also evidence of declining refinance volumes, Ellie Maereported last month that purchase originations outpaced refinances for the first time since Ellie Mae began recording origination data about two years ago.
With declining volumes, the industry cannot support the number of loan officers it has had on staff of late, and many originations shops are shedding employees. Wells Fargo, for example, is reportedly cutting 2,300 production jobs.
However, this glum news may have a silver lining, according to at least one industry executive.
“There’s a huge opportunity for former loan originators taking their existing skill set and industry knowledge and applying them in specialty servicing,” Patrick Norton,SVP of Fay Servicing, based in Chicago, told DS News.
“There’s enormous opportunity, and I don’t think it’s going to fade away in the near future,” Norton said.
Loan officers already have a broad and deep understanding of the mortgage industry. They are used to working with customers with challenging credit profiles, and they are adept at relationship-building, according to Norton.
These skills “translate very nicely to a career in specialty servicing,” Norton said.
In fact, Fay Servicing is expanding, and the company “targets exclusively former loan originators,” according to Norton.
Unlike refinancing, which experienced a recent boom and is now on the decline, Norton says specialty servicing will not likely see a decline any time soon.
Even after the industry works through the current backlog of delinquent and troubled loans, specialty servicers will remain an integral part of the industry, according to Norton.
The biggest adjustment for loan officers transitioning to servicing is the “distinct regulatory environment,” according to Norton. Fay Servicing offers new employees transitioning from the originations sector a two-week course to familiarize them with industry regulations and best practices.