Vaultedge Newsletter - MBA Annual 2022, M&A deals trend & Forecast 2023

November 07, 2022

Hope you are doing great ! 😊

As we head towards the end of 2022, there's a flurry of developments & activities that's keeping the mortgage industry pumped for 2023.

To start with, we just wrapped up a great booth exhibition at Mortgage Banker Association's last major event of the year - MBA Annual 2022. This comes at a time when MBA is predicting a dip in origination volumes for 2023 and industry is moving towards consolidation to arrest margin compression.

This week's newsletter captures some of these nuances & what's in store for the current week. Let's dive right in...

Weekly Roundup

The Mortgage Bankers Association predicts total origination volume to dip to $2.05 trillion in 2023 from the $2.26 trillion expected in 2022. According to Mike Fratantoni, MBA’s chief economist and senior vice president for research and industry technology, the likelihood of a recession, the Federal Reserve’s continued actions to tame inflation and ongoing affordability challenges will slow homebuyer demand and purchase origination volume in 2023 […]

_____________________________________________

For much of 2022, the mortgage lending industry has been in a state of flux with diminished loan volumes, rising production costs and declining loan origination profitability. Given this, Fannie Mae’s ESR group led a Mortgage Lender Sentiment Survey to better understand major cost drivers and how effective have technology investments been in bringing cost efficiencies.

It interviewed 200 senior mortgage executives about what's driving changes in loan origination costs, as well as the impact of recent digitization efforts on cost efficiency. Lenders reported that personnel-related costs, including back-end operational staff, compliance/legal, and loan officers, were the top areas increasing average loan costs. Digitization investments, including in back-end processing and consumer-facing technology, were the top areas driving down average costs […]

_____________________________________________

Mortgage M&A hit a new record in 2022 - making it the second-highest year of lender consolidations in the past three decades, according to STRATMOR Group.

This industry consolidation is mainly driven by expectations of continued margin compression throughout 2023-24 [...]

_____________________________________________

Wells Fargo, San Francisco, announced Kristy Fercho, head of Wells Fargo Home Lending, has been named the company’s new head of Diverse Segments, Representation and Inclusion, responsible for integrating diversity, equity and inclusion into every aspect of the company’s business and delivering marketplace and workplace outcomes.

_____________________________________________

Spotlight: What's new at Vaultedge

MBA Annual 2022: Hope you didn’t miss this one !

If there is a slowdown in the mortgage market (of course there is a slow down), it did not show in the MBA Annual conference held in Nashville last week.

It had the same ingredients that make every MBA Annual a must-go for every mortgage executive: Interesting lineup of speakers, festive booths/expo, amazing after parties (rivaling what you see in college towns) and great interactions.

In addition, this time there was music - with the MBA Annual happening in the music city Nashville, every event associated with the conference also had a live band playing. How cool is that!

Not to say that, the current market situation did not weigh in on people’s minds or it did not come up in conversations - it ofcourse did. But it was a fun event nevertheless.

Psst… amongst other good things, Vaultedge putting up a booth certainly counts as one.

Vaultedge had a big presence at the conference. Our leadership team was there in full force with both our CEO and CTO attending the conference. Needless to say, we had a really good time meeting some amazing folks from the industry.

Mortgage Vault Podcast: Season 2 - Launched with Sagent

When we launched Mortgage Vault Podcast: Season1 in early 2021, we had only one goal in mind - gather insights from senior leaders at some of the largest mortgage lenders & servicers to help industry professionals stay ahead of the curve.

Soon, it grew into one of the most impactful thought leadership channels with C-Suite speakers from industry biggies like - Freedom Mortgage, AmeriFirst, New American Funding and many more.

Taking cue from a successful run in season 1, we officially launched season 2 with - Dan Sogorka, CEO at Sagent.

In this inaugural episode, we sit down with Dan to understand how to avoid the ‘shiny new object syndrome’ and balance technology focus with people focus. Listen to the full episode here

Listen to this episode from Mortgage Vault Podcast on Spotify. In this episode, we are in conversation with Dan Sogorka, CEO & President of Sagent - a cutting-edge technology company that modernizes the lending and homeownership experience for loan servicers and millions of consumers across the country.

_____________________________________________

Coming week...

Events: TMBA’s 5th Annual Mortgage Symposium; 8th Annual Residential MSR Forum

As we head into 2023, we want to close the year with gathering key insights on how mortgage lenders and servicers are planning for the road ahead.

Towards that effort, we're super stoked to be visiting two upcoming mortgage conferences.

5th Annual Mortgage Symposium (Nov 7-8): which brings together decision makers, including CEOs and senior-level executives, mortgage investors, investment bankers, correspondent and retail production executives etc. to share learnings on what strategies worked in 2022 and why. We hope to meet some very interesting folks at the & get fresh perspectives for 2023. If you're heading there, we would love to meet you. Just pop in your name here

8th Annual Residential MSR Forum (Nov 14-15): is a servicer focused event that has more than 450 participants from Banks, Non-Bank Originators, Mortgage Investors, Hedge Funds, Private Equity & Other Institutional Investors. This forum is the only opportunity on the calendar that brings together owners and administrators of mortgage servicing rights for 1.5 days of dedicated MSR content. Having worked with some of the largest mortgage servicers in the country - PHH Ocwen, Valon Mortgage and BSI Financial, this is an event we can't miss.

If you're from the servicing industry & heading there, let's meet. Drop us a note at [email protected] & we'll work out a meeting schedule with you.

_____________________________________________

Till next time...stay happy, stay healthy 😊