The former mayor of Columbus, WI, Michael Eisenga, has found great success as a commercial real estate investor with his banking and finance background. Eisenga shares his insights on the future of the mortgage industry post-pandemic.
January 21, 2021 /MarketersMedia/ —
COVID-19 has had a significant effect on all industries, including real estate. The unexpected pandemic and quickly evolving events left mortgage companies scrambling, as they were not prepared for digitalization. While consumer behaviors lean towards online consumption, many lenders still originate loans exactly the way they did 20 years ago.
“This presents challenges for the mortgage industry needing to adopt new technologies amid the coronavirus crisis,” says Michael Eisenga, an expert in commercial real estate investing and mortgage lending.
Challenges that developed in the mortgage industry and impacted cash flow for mortgage servicers included historic levels of unemployment claims, declining home sales due to reduced inventory, decreased interest rates affecting margins.
The coronavirus revealed the mortgage industry’s lingering issues, such as an inability to adapt to user behaviors and utilize new technologies to offer services online.
However, it appears that the mortgage industry workers were more prepared for the current situation, compared to the crisis of 2008, when an array of issues such as rising energy costs; slack underwriting standards by Hedge Funds, Banks, Fannie Freddy; and regulations such as mark to market caused a huge upset.
Now that the coronavirus vaccine and stimulus checks are rolling out to the public, many mortgage industry experts predict a rise in mortgage rates.
“Despite slow growth in the near future, eventually, the housing market will continue to be stable through the second half of 2021,” – predicts Mike Eisenga.
Potential new home buyers looking to invest their money in real estate will most likely take action once all stay-at-home orders are entirely lifted. Homeowners with multiple residencies may consider selling one of their homes to eliminate one of the mortgage payments or choose to move to the suburbs.
“Also, I expect more movement from buyers from the larger urban areas to suburban areas,”- mentioned Mr. Eisenga.