Check out 2022 real estate industry predictions from a different perspective – the vantage point of mortgage lenders.

New Study Explores What Financial Companies See Coming in 2022

The COVID-19 crisis and its disruptions have stimulated new insights and opportunities for investors and policymakers.  New business models are stressing adaptability, flexibility, resilience and agility.

A new study by Arizent, the parent company of American Banker, The Bond Buyer, Digital Insurance, Financial Planning and National Mortgage News, indicates that financial and mortgage companies see a “back to normal” by July 2022.

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On the other hand, only 33% of all banks predict a full recovery in the second half of 2022 while 44% of banks see recovery only in 2023.

Despite inflation concerns being on “everyone’s” minds, deal making is predicted to thrive.  25% of financial institutions are expecting to consolidate by either buying or be acquired by a competitor in 2022 as.  Regional banks are expected to be the most likely dealmakers in 2022.

More than 80% of banks and mortgage companies are expecting their tech spending to increase in order to “catch up” with consumers wanting speed and ease. Likewise, AI tech is on the minds of 80% of financial advisors.

Everyone is worried about competition from Big Tech as Amazon, Google and other giants continue to muscle their way into payments, lending, insurance and banking.  Likewise, social and governance issues are becoming increasingly prescient.

Biggest industry Disruptors in Next Three Years

According to Arizent’s recent report, one-stop real estate shops or all-in-one real-estate players are considered to be the biggest disruptors over the next three years.  More than half, or 54%, of mortgage industry professionals will be watching and preparing ways to deal with this one-stop shop model.

Other potential industry disruptors include all-cash purchase programs (programs we’ve recently covered here) and iBuyer programs despite the recent debacle of ZillowOffers.  Some mortgage professions see iBuyers as referral partners for lenders.

Policy Predictions

Affordable housing is at the top of the priorities list, according to Arizent’s report.  Affordability was followed by reform of government-sponsored enterprises (GSEs), fair lending, revisions to the qualified mortgage definition within the ability to repay rule and more states applying the Community Redevelopment Act to nonbanks.

Lenders are most likely to consider affordable housing as the top priority as a way to both expand/extend their services to younger, entry-level and diverse homeowners and to replace the fading refinance boom.

Likewise, the outsize presence of Fannie Mae and Freddie Mac make affordability policies and revisions crucial.

Foreclosure Forecast in 2022

Mortgage professionals generally predict more foreclosures in 2022 than the rock-bottom levels and pace of foreclosure activity during 2021.

Allen Price, senior vice president with BSI Financial, said, “We think next year, assuming the Delta (and the threatening Omicron) variant isn’t an issue, and the booster works, the industry will move back to what is a normal foreclosure environment, for the most part.  There will be jurisdictional exceptions, but on an overarching basis we expect to go back to more what it looked like in the pre-pandemic environment.”

(Of course, what “normal” means could have varying definitions.)

Jay Jones, executive vice president of servicing with the Mr. Cooper Group, said in an email, “We don’t anticipate seeing a normalization of foreclosures similar to the pre-pandemic levels in 2022,. And it’s important to understand that the industry has been heavily preparing for this moment.  Services need to ensure seamless communication with borrowers, so they can exit forbearance plans and do everything possible to avoid foreclosure.”

Thanks to National Mortgage News.




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