Business process streamlining, talent management and leadership have been the top priorities of lenders for three years straight.

Business process streamlining remained the top priority for a plurality of mortgage lenders for the second consecutive quarter, while talent management surpassed consumer-facing technology as the second most important business priority, according to Fannie Mae's Q2 2021 Mortgage Lender Sentiment Survey® (MLSS). In 2020, the mortgage industry originated a record-breaking $4.3 trillion, its largest annual volume since 2015. However, despite the continued recovery of the larger economy, for the mortgage industry, in some ways 2021 has shaped up to be a more challenging year. The absence of further mortgage rate declines is constraining the refinance market. Meanwhile, the lack of homes available for sale relative to demand, strong home price appreciation eroding affordability, and construction supply-chain disruptions are all headwinds for the purchase market. Consistent with these trends, 70 percent of lenders indicated that they expect their profit margins to decline from the highs set in 2020, the largest share since the survey’s inception in 2014. For three consecutive years, lenders have cited business process streamlining, talent management and leadership, and consumer-facing technology as their top business priorities. In Q2 2021, the priorities of process streamlining, and talent management reached their highest shares in five years. Moreover, the importance of consumer-facing technology has slowly ticked down over the past two years, after peaking in 2019. The importance of "cost-cutting," another commonly cited business priority, fell further this year after jumping in 2018.  Lenders' business priorities appear to be consistent with their assessment of market threats and trends. Once again, most lenders cited "online direct-to-consumer lenders" as their biggest expected competitor over the next five years, followed by mortgage brokers. Many pointed to direct-to-consumer lenders’ advantages in user experience, streamlined mortgage processes, and advanced analytical and marketing capabilities. In preparing for the shift toward a smaller, more purchase mortgage-focused market, most lenders cited improving the mortgage origination process and customer experience as their top strategies

Source: Fannie Mae