One more for The Worry List

As you may know, I keep a Worry List on behalf of my clients.  As I’ve mentioned before, it’s not healthy to simply sit around and worry about potential threats, dangers and pitfalls.  But it’s also pretty dangerous to live oblivously in this market as a mortgage lender or broker.

These days, I’m worried about smaller to mid-sized lenders and brokerages that aren’t planning ahead sufficiently.  It’s amazing how little some otherwise highly viable businesses have done to prepare for what should be a fairly turbulent beginning to 2014.  We know that refinance will decline significantly.  We know that several regulations/rules (QM, RESPA/TILA) will affect mortage lending in ways few regulatory changes have.   We know that things are changing  in the warehouse, wholesale and correspondent channels…from GSE requirements to investor capital requirements to the participants themselves.

I say it over and over again:  change means opportunity.  But that’s true only for those prepared to meet it and flexible enough to adapt.  One of the obvious strategies for such a market in flux has been “grow or sell.”  Many have done that.  Those that didn’t may have missed the boat…at least for now.  Liquid will be king for the foreseeable future, and suddently servicing is a viable product line for some lenders.

I’m not too worried for the largest and most sophisticated firms out there.  They’re ready.  But I do worry for the little guys…the emerging bankers and the like.  It’s not too late to build a Plan B…but it will be soon.

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