Stanley Middleman: As We Overcome the Challenges of 2020, Hope Lies Ahead
Stanley Middleman is founder and CEO of Freedom Mortgage Corp., one of the largest and fastest-growing full-service mortgage companies in the U.S. He is a nationally recognized business strategist, real estate investor and philanthropist, with more than 30 years of experience in the mortgage banking industry. He is an active member of the Mortgage Bankers Association, a member of the Housing Policy Executive Council and serves on the National Association of Hispanic Real Estate Professionals (NAHREP) Corporate Board of Governors.
One third of the way into 2021 we find ourselves immersed in questions and wonderment as to what the future of the residential finance business will look like. Originators join with servicers, investors, and borrowers all wondering what comes next. What does our future hold?
I think it is wise to start with what we do know and couch our expectations or at least possibilities from there. Last year was by any view or appraisal, extraordinary. For generations, we will reflect on 2020 as did those who lived through a world war, the Great Depression or any number of such events throughout history. We spent a year in captivity, either working from home or sleeping at work. We cautiously ventured out at our own risk and saw huge swaths of the population sick or even dying.
As unemployment soared, mortgage and rental payments were in many cases suspended. Foreclosures and evictions have been put on hold. The government mailed checks to nearly everyone, suspended taxes, and passed aid bills which were signed into law. Huge amounts of fiscal stimuli flowed into the financial system. Still, the economy slowed. There were significant breakdowns in the supply chain.
We turned to our televisions and computers and phones for amusement, entertainment and news. We found the worst of ourselves and society taking center stage. Social injustice and inequity became a part of our everyday lives. Large numbers of people, particularly children, were going hungry.
For the most part, we went to work, and in this work, we found solace. We found purpose, and many of us found ourselves to be more than we knew or believed we could be. We worked from home. Only five years earlier, what was a bad situation would have been far worse economically. Last year, broadband was the life preserver our economy clung to. It was this life preserver that allowed us to individually persevere and collectively to thrive.
Our industry helped millions of people who struggled in this new reality to pay their mortgages or access government enabled forbearance and not damage their credit. As interest rates dropped, millions more benefitted by refinancing their homes. People moved into new homes and populations shifted to more family friendly environments with open space they couldn’t find in urban areas.
In short, humans did what they do. Not only did they survive, they adapted and are thriving once again.
We, in the mortgage industry, enjoyed wide margins, record volumes, and unbridled need for our help and services from desperate consumers in servicing. We rose to this occasion.
I hope going forward that our view of the future becomes something that looks like normal. On some levels, the adrenaline rush will be missed. But on other levels, it will be great to take stock of where we are and get back to the business of helping families finance their homes in a very boring and methodical way.
I think that is what 2021 looks like. I will call it normal. Delinquencies should drop as people get back to work and refinances will slow as interest rates moderate somewhat. Home sales and purchase money loans will grow to meet the demand as we start to solve the inventory shortage which is driving up prices.
Credit remains strong and employment levels are rebounding. More and more people are getting vaccinated and hope is directly in front of us. Happily, 2020 is behind us and will be left to our scarred memories to share with generations to come.
With 2022 approaching, I think our industry is about to face the beginning of what could be the largest origination volumes on record. I can’t wait to face these challenges. They will be just as exciting and daunting as the ones we have just seen. Hopefully, however, a little bit less dramatic.
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