Beyond MBA Annual: Borrower Experience Strategies for 2023

The Mortgage Bankers Association’s (MBA) annual conference is the biggest conference in the mortgage industry, bringing together thousands of innovators, experts, and professionals from the world of real estate finance. They come to network, learn, and even have fun! The conference is also a fantastic opportunity to share what we’re most passionate about—creating a financial system that can work for everyone. 

During the conference we enjoyed many engaging discussions, educational sessions, and exciting after hour events. At the same time, many important topics came up along the way.  

A Looming Recession in 2023

During a market outlook session at the MBA conference, Mike Fratantoni, MBA’s chief economist and senior vice president, forecasted a recession for next year. He also believes the Fed’s inflation target won’t be met until 2024. (Source: Fox News, “Inflation to remain high through 2024, recession on its way: MBA forecast”)

Fratantoni said, “Next year will be particularly challenging for the U.S. and global economies. The sharp increase in interest rates this year—a consequence of the Federal Reserve’s efforts to slow inflation, will lead to an equally sharp slowdown in the economy, matching the downturn that is happening right now in the housing market.”

Curious as to how economists forecast recessions? Read the White House blog, “How Do Economists Determine Whether the Economy Is in a Recession?”     

Mortgage Rates Expected to Drop to 5.4% 

While today we’re seeing mortgage rates hitting 7% and higher, Fratantoni expects rates to be closer to 5.4%. He suggested that current rates are a reflection of a spike that is influenced by a “financial dislocation” and a “heightened level of volatility in the market.” He feels that the likely looming U.S. recession will pull mortgage rates down.  

During the conference, MBA also released its latest economic and mortgage market forecast. According to the report, the total mortgage origination volume is expected to decline to $2.05 trillion in 2023, compared to an estimated $2.26 trillion in 2022. Purchase originations are expected to decline 3 percent to $1.53 trillion in 2023. On the flip side, refinance volume is forecasted to decrease by 24 percent, hitting $513 billion. 

A Financial Ecosystem That Works for Everyone

With a recession on the horizon, inflation, higher mortgage rates, and a lack of affordable housing, it’s never been more important to take stock into protecting and investing in the borrower experience. Borrower retention will be crucial over the next few years. 

When it comes to protecting and investing in the borrower experience, there are a few things you want to do: 

  1. Evaluate your tech stack – Is your tech stack slowing you down or speeding things up? It’s critical to evaluate your tech stack and ask yourself if it truly supports your business goals. The right tech stack will help you track ROI, and much more.   
  1. Automate manual processes – In many cases, manual processes are time consuming and expensive. With the right technologies on hand, you can cut costs and streamline business-critical processes with automation. 
  1. Meet borrowers where they are – Understanding when to engage with borrowers and how to support their needs is an important part of creating a positive borrower experience. Asking yourself if your communications are timely, are they seamless as they are transitioned to a new lender or servicer?  
  1. Enabling borrowers’ financial health – Today’s borrowers are accustomed to an accessible, digital experience, one that allows them to take control of their finances and helps them set their own budgets. Flexibility with debiting schedules also supports borrowers’ financial health. Has your organization crossed the digital divide with a modern digital payment platform? 

While the world may feel post-apocalyptic at times, the next two years will be incredibly important to your business. Today’s borrowers will remember their experience with your business. Will it be a good experience or a bad one?    

We want to know what you think! 

Contact Us Today 

Curious to learn about the technology we’re so passionate about? 

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What better way to stay relevant than to create a customer-centric environment? Don’t miss mortgage industry personality Rob Chrisman’s latest podcast, “No Borrower Left Behind: Surviving and Thriving in a Down Market.” 

To listen to his podcast, visit his website today!