The residential mortgage finance industry converged in Denver Oct. 22-25 for the Mortgage Bankers Association annual convention. The good news is that lenders are having a good production year and profitability, in general, is strong. Of course, mortgage lending is highly cyclical, and most professionals will be trying to figure out what’s ahead for 2018.

Plenty of executives have been quoted in in various trade publications over the past few months believe that the industry is in for considerable merger and acquisition (M&A) activity in the year ahead. Then again, we’ve heard this prediction before. Think about it: When’s the last time a top-10-ranked lender was sold? It’s been a while, and if you look at today’s top 10, none appear to be headed for the exits. There’s not even a rumor!

More than 4,000 registered attendees roamed the halls and sessions during this year’s convention. This show certainly didn’t disappoint! All segments of the mortgage business were well represented, from technology firms to warehouse banks and correspondent investors.

Leading mortgage industry experts engaged session attendees with a range of hot topics, including GSE reform, regulatory reform, affordable housing, digital revolution, purchase and refinance market and mortgage servicing rights.

As many of you know, the MBA convention is a great venue for networking and learning about current happenings in the mortgage industry. Here are a few need-to-know takeaways from this year’s convention:


  • Lenders/originators have put technology and product development in the forefront of reducing production costs and growing revenue


  • It is expected that there will be quite a bit more M&A activity during the first quarter of 2018 as margins are becoming razor thin in most channels


  • Non-QM activity is expected to double in volume from this year into 2018. All industry participants remain optimistic for growth in this segment through all channels. Some are even gearing up and growing their correspondent lending divisions
  • There is huge interest in construction lending and renovation products. Investors are even starting to take notice


  • Mortgage fulfillment services could see a steady pick up in business as banks and mortgage companies look to reduce costs and regulatory burdens by outsourcing these services


  • Warehouse banks and aggregators are starting to feel the pressure from originators to participate in eNotes and eClosings. This is probably a late-2018 or early-2019 overall market happening


  • Lenders are noticing that the highly competitive spirit between Freddie Mac and Fannie Mae is starting to fuel product variations and special waivers. Some industry participants mentioned that this is the highest level of competition since pre-financial crisis levels


  • Community lending, affordable housing and lack of housing inventory were very hot topics. Some lenders mentioned they would be happy with even 3-months’ inventory right now


  • Most firms forecast a slight drop-off in overall volumes from this year to next, primarily due to less refi. Many are looking to grow organically and bring in production teams and/or companies in geographically targeted areas
  • Lenders should choose and implement technology with the customer’s perspective in mind. Ease of doing business should be part of this strategy; whether it’s the consumer/borrower or the loan officer


  • The scratch-and-dent loan market is still alive and well. As volumes taper off due to seasonality, lenders have more time to clean up their portfolios and see what should be sold; as for nonbanks, they can move these loans off their warehouse line


  • The GSEs’ are on pace to implement their Single Security and Common Securitization Platform (CSP) initiative by mid-2019 with testing to occur in 2018 with multiple pilot lenders


  • High prepayment speeds relative to Veterans Administration Interest Rate Reduction Loans (IRRLs), how to handle these “abusive acts” and how to protect our Veterans was a hot topic. In some cases, the same borrower was refinanced 3 times within a year! Ginnie Mae representatives said there will be action soon from the VA on the management of these prepayment speeds

Lenders and investors alike are cautiously optimistic going into 2018. The themes for the coming year revolve around economic uncertainty, controlling production costs and growing revenue. What we do know is that the purchase market will not exceed the forecasted drop in refinances. With that said, lenders and investors expect overall single-family 1- to 4-family originations to drop slightly from this year’s expected volume. Their challenge will be to compete in a shrinking market. That’s where technology, product and people will make all the difference as we gaze into our “crystal ball.”

Did you attend this year’s 2017 Mortgage Bankers Association Convention? Share your takeaways in the comments below!

Lloyd San

Lloyd San - Retired MGIC Mortgage Market Manager

A 30-year mortgage industry veteran, retired in 2021, Lloyd San served as Mortgage Market Manager for Mortgage Guaranty Insurance Corporation (MGIC). Overseeing a national effort, he was responsible for managing all client-related capital market activities in the areas of bulk and correspondent loan referrals, investor introductions, structured products, whole loan sales, as well as product and personnel introductions.

In addition, he is chairman of the California Mortgage Bankers Association, Secondary Marketing Executive Committee and also serves on the Western Secondary Conference Committee.

A graduate of San Diego State University in California, Lloyd received his MBA in Financial Management from National University. He also holds a California Real Estate Broker’s License.

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