Adapting To The New Normal
The challenges caused by the COVID-19 pandemic have undoubtedly caused major disruptions in the mortgage brokerage industry: increasing debt burdens, growing housing shortage, and daunting economic uncertainty. The total inventory of residential real estate properties for sale in the nation dropped almost one-third in July 2020 from the year prior. During the downturn of the global economy, real estate brokers struggle to make a profit, secure new transactions, and stay in business. The brokerage industry remains at risk and continues to look to technology to streamline processes and keep customer engagement high in the new contact-free and virtual workspace.
On the brighter side, the Federal Reserve has been working hard since the beginning of the pandemic to counter these headwinds with the historically low-interest rates that are most likely to continue to stay low for the foreseeable future. The former Fed chairman Jerome Powell stated that the Federal Reserve would not increase interest rates to promote maximum employment and stable inflation. The Federal Reserve also actively bought billions of dollars worth of mortgage-backed security to maintain the healthy flow of credit in the economy. These federal policies promote cheap mortgages and booming demand for refinancing and purchase mortgages. Last year, the mortgage rate reached new record lows sixteen times, starting from 3.61% in January to 2.66% in late December. The annual loan origination volume climbed up to $4 trillion at the end of the year. Refinance activity was up 88% in November 2020 compared to the year prior.
With the low supply and overwhelming demand, brokers need to utilize technology to speed up the loan origination process and achieve better efficiency. At the same time, public health concerns from the pandemic highlight the preference for a contact-free/digital mortgage over the traditional face-to-face experience. In 2021, the brokerage market is more competitive than ever. Innovation, automation, and technology are no longer underutilized “nice-things-to-have” but crucial requirements for a brokerage business to survive and thrive. Given customer satisfaction depends on a stress-free and efficient experience, it is important to choose the right platform that is reliable, scalable, and effective. The Volly Platform is a fully integrated cloud-based SaaS platform that can help brokers create a safe secure and seamless customer journey by reducing processing time, simplifying the loan origination process, and utilizing leading-edge technology without sacrificing personal interaction. All this while respecting the need for personal health and safety protocols that have become the new norm in our industry and our world.