Greg Holmes of Credit Plus on COVID Challenges
Greg Holmes is Managing Partner with Credit Plus Inc., Salisbury, Md., a third-party verifications company serving the mortgage industry. He can be reached at gholmes@creditplus.com.
MBA NEWSLINK: What are your lender clients telling you about their experiences during COVID? Has it been more difficult for them to verify key criteria?
GREG HOLMES, CREDIT PLUS: Verifications in general have been affected. At the beginning of the pandemic, there were shutdowns and companies weren’t prepared for their HR departments to be closed, which made it difficult to verify employment or income. Some small credit unions and banks were closed – leaving lenders unable to verify assets or payments on consumer loans and credit cards, mortgages, etc. because these businesses weren’t prepared for work from home mandates.
In the middle of the pandemic, things got better. That’s when forbearance kicked in an increasing amount of people were getting laid off. In turn, that created a reverification problem – determining whether or not someone who had a job at the beginning of COVID was still employed months later.
Today the challenge of COVID is all about the volume – rates were low prior to the onset of the pandemic – and remained that way throughout it. The combination of increased volume and COVID resulted in many people renovating their homes or looking for larger homes for more family members to quarantine, etc. This increased pace forced many lenders to hire a lot of people. Given all the volume out there, there could be some quality issues in the loans made during this time.
NEWSLINK: What do you think has been the biggest challenge lenders have had to overcome during COVID?
HOLMES: Volume. They are going through mortgage fatigue right now in multiple areas. The IRS shut down for three months, causing a backlog, and volumes in call centers and at creditors went through the roof. On top of the increase in business, you have these issues, which backed things up even more. It’s been an exasperating challenge.
NEWSLINK: Has the pandemic given your clients reason to assess what shortcomings they might have, technology-wise, and how they can adapt?
HOLMES: Yes, I think there will be a greater emphasis on using technology. I don’t think lenders have had time to assess it simply because of bandwidth. They haven’t been able to change policy but I do think that is likely coming next year, especially since refinances are supposed to decrease by half.
NEWSLINK: What are some of the positive outcomes Credit Plus and your lender clients have experienced as a result of the pandemic from a business perspective?
HOLMES: No secret here ─ lenders are making more money than ever before. The financial benefit has been huge. It created jobs. It created a greater awareness of the need for digital. Once things slow down, I think lenders will take a hard look at where digital technologies need to be deployed so they are better prepared for the next unforeseen event.
NEWSLINK: How do you think the mortgage industry will change moving forward?
HOLMES: Eventually, when lenders can catch their breath again, they will adapt more and better technology – anything that will enable the digital mortgage will be emphasized. And utilizing Point of Sale products will force more businesses into those digital arenas and keep borrowers permanently distanced from the mortgage process.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)
