As

mortgage
rates
edge
closer
to
the
6%
mark,
optimism
has
spread
across
the
industry.
Lenders
are
beginning
to
gear
up
for
what
is
expected
to
be
a
“mini
refi
boom.” 

But
this
wave
will
differ
significantly
from
previous
ones.
Mortgage
industry
leaders
caution
that
it
won’t
provide
a
life-saving
boost
for
originators,
but
it
does
present
strategic
opportunities.

“It’s
going
to
be
a
mini
refi
boom.
It’s
not
going
to
save
producers’
lives,”
said

Candice
McNaught,
senior
vice
president
of
national
sales
at
Dallas-based

Supreme
Lending,
during


HousingWire’s
IMB
Summit
in
Dallas
on
Tuesday. 

At
Supreme
Lending
—
which
produced
approximately
$3.7
billion
in
origination
volume
over
the
past
12
months,
according
to
mortgage
tech
platform

Modex
—
executives
are
focused
on
improving
their
sales
teams’
skills.
Many
loan
officers
have
shifted
their
focus
away
from
refinances
in
recent
years,
so
a
refresher
is
needed.

“We
have
taught
loan
officers
how
to
redo
loan
refinances.
There
are
so
many
who
forgot
how
to
structure
a
streamline,
and
we
are
letting
them
know
it’s
OK.
We’re
going
to
get
them
back
to
the
basics,”
McNaught
said. 

Yet
McNaught
stresses
that

companies
shouldn’t
limit
their
focus
to
refinance
and
purchase
loans.
Exploring
opportunities
with
other
products
will
strengthen
company
loyalty
among
sales
leaders
and
provide
long-term
value
beyond
this
refi
wave. 

The

Mortgage
Bankers
Association
(MBA)
estimates
that
refinance
production
is
projected
to
reach
$591
billion
in
2025,
nearly
triple
the
volume
of
2023.
While
this
uptick
is
encouraging,
it
pales
in
comparison
to
the
$2.6
trillion
in
refinances
seen
in
2021.

“It’s
never
going
to
be
like
2021
unless
there’s
another
pandemic
or
something
else,”
said

Kevin
Peranio,
chief
lending
officer
at

Paramount
Residential
Mortgage
Group
(PMRG).
“But
about
$3
trillion
worth
of
loans
are
in
the
money
for
refinance
as
rates
keep
coming
down
—
that’s
all
the
purchase
money
that
has
been
done
for
the
last
couple
of
years
amid
higher
rates.
So,
there’s
a
meaningful
refinance
business.“

Lower
rates
do
lead
to
improved
home
affordability.
MBA
data
shows
that,
in
2025,
purchase
loan
production
is
expected
to
increase
30.8%
to
$2.38
trillion. 

Peranio’s
message
to
loan
officers?
“Don’t
give
up
on
the

real
estate
agents
who
need
you
now
more
than
ever.”

The
retention
battle

A
potential
challenge
in
this
upcoming
refi
wave
will
come
from

servicers
positioning
themselves
aggressively.
Over
the
past
few
years,
struggling
lenders
have
sold
mortgage
servicing
rights
(MSRs)
to
shore
up
their
cash
positions
during
periods
of
higher
interest
rates
and
shrinking
loan
production.

With
rates
dropping,
servicers
are
poised
to
use
their

growing
MSR
portfolios
to
offer
refinances
directly
to
borrowers,
creating
direct
competition
for
other
lenders.

“The
biggest
threat
is
thinking
that
the
refi
business
is
going
to
be
easy
this
time
around,”
Peranio
said.
“The
servicers’
game
is
really
strong.
“The
competition
between
servicer
and
originator
is
going
to
be
a
little
ugly
this
time
around.” 

Connecticut-based


Planet
Financial
Group,
led
by
CEO
and
president
Michael
Dubeck,
has
built
out
its
servicing
portfolio
over
the
past
few
years.

Inside
Mortgage
Finance
shows
the
value
of
its
owned
servicing
book
was
$96
billion
in
the
second
quarter
of
2024,
making
it
the
22nd-largest
in
the
country. 

The
company
has
also
improved
its
borrower
retention
capabilities.
According
to
Dubeck,
it
has
invested
in

data,
marketing
and
sales
skills
to
take
advantage
of
this
portfolio. Data
from

Fitch
Ratings

shows
that
Planet
has
a
retention
rate
of
28%
compared
to
the
industry
average
of
8%.

“We
had
our
best
lock-in
day
in
the
history
of
the
company
last
week.
But
it
doesn’t
come
easy,”
Dubeck
said. 

He
went
on
to
say
that
the
company
usually
acquires
smaller
MSR
bulk
deals
of
“half
a
billion,
a
billion
and
a
half,”
very
often
from
single-channel
originators.
But
occasionally,
it

bids
on
larger
bulks.
He
sees
consolidation
in
the
MSR
market
as
it
becomes
more
efficient. And
he
also
pointed
out
capital
requirements
from

Ginnie
Mae
that
can
motivate
some
MSR
sales. 

“The
bigger
names
are
probably
going
to
become
more
competitive,
and
it’s
going
to
be
harder
for
intermediate
smaller
companies
to
keep
up,”
Dubeck
said. 

Low-balance
loans

Regulators
are
also
expected
to
play
a
critical
role
in
shaping
the
next
refi
wave.
They
believe
many
borrowers
with

low-balance
loans
were
overlooked
during
the
2020-2021
refinancing
frenzy
due
to
high
origination
costs.

At
the

Consumer
Financial
Protection
Bureau
(CFPB),

Director
Rohit
Chopra
has
indicated
plans
to
incentivize
lenders
to
cater
to
these
underserved
borrowers.

“There
are
thoughts
and
ideas
about
creating
greater
incentives
for
IMBs
to
participate
in
those
lower-end
loan
cost
structures,”
said
Taylor
Stork,
chief
operating
officer
of

Developer’s
Mortgage
Co.
and
president
of
the

Community
Home
Lenders
of
America. 

“When
you
look
at
what
FHFA
is
driving
through
the
enterprises,
through
the
scorecard
system,
to
create
additional
incentives
for
low-ball
loan
amounts,
those
can
create
some
profit
opportunities,
but
it’s
a
distinct
challenge.
But
it’s
also
simultaneously
a
distinct
opportunity
because
there
are
a
good
number
of
people
who
didn’t
get
the
3%
refi
and
will
be
potentially
able
to
refinance
it
at
5%
and
6%.” 

Related