A new white paper published by Altisource, “Navigating the Challenges of COVID-19, Now and in the Future,” discusses the future of the mortgage industry once the pandemic passes.
“Mortgage companies began scrambling to operationalize in a rapidly evolving and unexpected environment that no one was fully prepared for,” Altisource said in the white paper. “As with the 2008 housing crisis, our industry was too tightly interconnected that it didn’t take long for a domino effect to ripple throughout the community and impact every corner of it.”
In May, the housing and mortgage industries faced historic levels of unemployment claims—surpassing 30 million in June—falling home sales and interest rates, and forbearance plans that are impacting cash flow for mortgage servicers.
The analysis in this white paper stemmed from Altisource’s Mortgage Industry Pandemic Summit, in partnership with Five Star Global. Altisource’s CEO Bill Shepro said in the white paper that there was “no amount of preparation” that could have prepared the mortgage industry for COVID-19.
Five Star Global's President and CEO Ed Delgado said crises have always been present in the mortgage industry and will always have an influence on the industry manages operations, relate to clients, and protect homeownership.
"We've learned a lot since the 2008 crisis, and we are already farther ahead now than we were then," Delgado said.
Experts within the session The Economist Magic 8 Ball: What to Expect in the Next Year, had a generally favorable view on the economy moving forward.
“While we might not show positive growth for the calendar year, the experts anticipate a sizable rebound in Q4 or the first half of 2021 for many reasons,” the white paper said. “They expect to see a quick reversal of the recent massive rise in unemployment due to the fact that most of the jobs lost in the last few months were hourly workers, so many may return to work soon.”
Of all attendees polled, 48% said the biggest challenge facing them was mortgage forbearance. This was followed by tightening credit standards (25%), operational challenges to closing loans (11%), utilizing and implementing new technology (11%), increased information security with remote working (5%).
Additionally, 17% of attendees said the foreclosure rate will exceed the 4% rate of the Great Recession, while 50% said it would be between 2-3%.