Right now, it is great to be a mortgage servicing industry professional, especially if you work for a non-depository institution. According to the Bureau of Labor Statistics, low mortgage rates allowed for increases to payroll for nonbank mortgage brokers, which means more jobs for MLOs.
Part of the increased demand for mortgage professionals comes from the relief provided by the Federal Reserve when it bought mortgage-backed securities to drive down the rates, which has prompted many homeowners to refinance.
With the increased demand for mortgage services, we can rest assured that, even though we will face challenges from COVID-19 moving forward, our industry will have plenty of work to go around.
Mortgage Rates at an All-Time Low in June and July, August to Continue the Trend
The U.S. gross domestic product fell at an unprecedented rate in the second quarter. Usually when the economy shrinks, mortgage rates also fall, which has played out in the numbers—the 30-year fixed-rate mortgage averaged 3.18% APR while the 15-year fixed-rate mortgage average fell to 2.71% APR.
The mortgage rate forecast for August looks like it will continue this trend, with rates likely to set record lows for the third consecutive month.
Forbearance Rate Is Down
In July, the forbearance rate for mortgages backed by Fannie Mae and Freddie Mac also dropped to 5.64%, a three-month low, while the overall average fell to 7.8%. Since the start of the pandemic, this is the most improvement that we have seen, and the trend appears to be continuing.
Fewer people are having trouble paying their mortgages, and that is a good thing for everyone.
Other Factors Could Affect Nonbank Mortgage Servicing Jobs
According to a report from the Conference of State Bank Supervisors, MLO employment has remained flat over the last year. However, we have also seen the number of nonbank companies rise substantially and the number of depositories fall slightly. The uptick of nonbank companies seems to have contributed to a spike in nonbank employment over the past year, from just over 290,000 in May 2019 to around 314,000 in May of this year.
Unlike during the last financial crisis, the mortgage industry is looking much more secure, though there are still risks. While the industry has a much healthier outlook this time around, with fewer in forbearance and fewer foreclosures, mortgage servicers need to be diligent. With the influx of requests and queries from borrowers, it is easy to become overwhelmed, which could result in poor service and missed opportunities for both borrowers and MLOs.
Failing to help at-risk borrowers could lead to increases in delinquencies and foreclosures.
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