Finance and Accounting Functions in High Demand as Lending Volume Surges

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Initially, the global pandemic dramatically disrupted virtually every existing industry worldwide. The banking and consumer lending marketplaces were no exceptions. Widespread layoffs, record unemployment spikes, and a highly uncertain future became the norm for consumers and small businesses.  However, banks and other lending institutions became inundated with the demands of forbearance requests, PPP loans, and a spike in volume due to the plummeting rate environment.

Many financial institutions quickly realized they were unprepared for such a shock to the system and scrambled to adjust strategies, adapt to a rapidly emerging new normal, and brace for further disruption. 

Several months removed from the onset of the crisis, however, across the board lenders are experiencing a continuing surge of demand month after month. Here are just a few excerpts that encapsulate the volume spikes we’re seeing.

An article published just a few days ago touches on just how starkly lenders are experiencing, frankly, explosions in demand. Rocket Companies (owners of Rocket Mortgage and Quicken Loans), a relatively fresh name on the stock exchange, recently released its Q2 results, reporting a “net revenue increase of 437% on a year-over-year basis to $5 billion. That was on the back of loan origination volume that more than doubled over that stretch of time to more than $72 billion—a new record for the company.”

Another article published recently by the Washington Post provides insight on the link between a 49-year low for the 30-year fixed rate mortgage (a record that has been set eight new times since March) and rising purchase applications:

“Purchase applications dipped slightly the last week of July, but have risen on an annual basis for an impressive 11 straight weeks,” said Bob Broeksmit, MBA president and chief executive. “Homebuyer demand has remained strong all summer because of record-low mortgage rates and households looking for more space during the ongoing pandemic. Refinance activity was more than 80 percent higher than last year and has consistently outpaced year-ago levels.”

In an effort to not deprive you of sources, yet another article from Mortgage News Daily, provides more proclamations of unprecedented numbers for lenders, beginning with sharing that builders have reached a 32-year old record this August for confidence, measured by the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

Providing additional context, the article reports:

NAHB chief economist Robert Dietz said the August reading is a sign that housing continues to lead the economy forward. The demand for new single-family homes continues to be strong, he said, and low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI. Single-family construction is also benefiting from a noticeable shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”

After initial efforts to proceed through and emerge from the coronavirus pandemic with their teams in tact, organizations are now struggling to keep up with the pace, close the books, and analyze information quickly enough to get actionable information to their originations teams so they can react to the market as quickly as it’s moving.  

Companies that buckled down by putting key strategic efforts on hold when the pandemic started are realizing that they don’t have the structure in place to keep up with the influx of business they are experiencing. For example, many finance teams are struggling to close the month end books and analyze information quickly enough to make it actionable for their originations partners.

Without the depth and experience in finance and accounting teams leadership doesn’t have the transparency they need to manage sustainable and intelligent growth. In order to responsibly manage, lenders must be provided accurate timely data quick enough for them to react before it’s too late.

Huffman Associates provides executive search services to the mortgage and consumer lending industry nationally. We help our clients keep pace with changing times by identifying and placing the leaders needed to scale and grow their business.

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