Agustin Del Rio: Bulls, Bears and Mortgages

Augie Del Rio

Agustin (Augie) Del Rio is Co-founder and CEO of Gallus Insights, Chicago, a Software-as-a-Service (SaaS) provider of Business Intelligence & Data Science for mortgage lenders and servicers. Prior to Gallus, he was an Investment Banking Vice President at Goldman Sachs in New York. After five years on Wall Street, he led the Financial Planning and Analysis Division at Caliber Home Loans. He can be reached at

As the financial winds of the pandemic swirled, the mortgage market took center stage in the economic theatre. Its performance? Spellbinding highs followed by precipitous lows, a dramatic rollercoaster that even seasoned Wall Streeters couldn’t ignore. At the zenith in Q4 of 2020, the Last Twelve Months revenues for the eight public players dazzled at ~$40B. By contrast, come Q2 2023, they had dwindled to a mere ~$10B. Profits exhibited a similarly dramatic arc: from a robust ~$6B at the peak to landing firmly in the red at the trough.

Now, with such striking figures, one might think, “Wall Street must have the mortgage market all figured out.” Alas, think again.

The spectacle was there for all to see: buoyed by an unprecedented environment, mortgage lenders posted jaw-dropping financials. The markets, in their exuberance, responded with soaring valuations. Yet, herein lay the Achilles’ heel: a myopic view that lacked long-term foresight.

Historically, equity research analysts (accompanied by many mortgage aficionados) oscillate between projecting the future and then retreating to explain why reality deviated from their forecasts. The fickle nature of interest rates throws spanners into the most meticulously crafted of predictions. Yet, when the tide turned and the previously buoyant revenues and profits began to wane, the valuations, unsurprisingly, took a nosedive.

 But should we really be surprised? Did Wall Street get too caught up in the moment, failing to adopt a longer-term view when valuing these freshly public mortgage lenders? Perhaps the Street should have heeded the timeless wisdom: what goes up must, inevitably, come down.

Which leads us to a ponderous thought: Should Wall Street be approaching the valuation of mortgage lenders more as one might a real option? After all, investing in a mortgage lender is, in essence, buying into the potential windfall of a refinance boom while also being mindful of the inherent risks tied to the industry’s volatility.

Traditional forecasting models need a shakeup. Rather than attempting to crystal ball the future, a scenario-based methodology could offer a more grounded approach: “If rates decline, here’s the potential outcome; if they rise, brace for this trajectory.”

In conclusion, while Wall Street’s short-term acumen in reacting to the mortgage market’s meteoric rise was evident, its lack of foresight in predicting the inevitable downturn was glaring. It’s time for a recalibration, a more nuanced approach to valuing an industry known for its peaks and troughs. Perhaps the next time the mortgage market dances to a different tune, Wall Street will be better prepared to join in step.

(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 NewsLink Editor Michael Tucker at or Editorial Manager Anneliese Mahoney at