Smaller mortgage lenders competing with large firms face three major hurdles, according to industry experts: Automation, a labor shortage and competition from direct Internet mortgage lenders.
“Significant labor shortages,” “business process streamlining” and “consumer-facing technology” are among the biggest obstacles facing smaller lenders, according to Mortgage Professional America.
Fannie Mae Vice President and Deputy Chief Economist Mark Palim told MPA that “small businesses are having a hard time finding workers, so the need to retain talent is a top consideration for lenders.”
Online lender-to-consumer organizations were also cited by many lenders as a source of competition, though Palim argued that the mortgage lending industry is “not all going to go online,” citing younger customers who often prefer a face-to-face interaction when embarking on a home mortgage.