Mortgage Banking
Competitive Landscape
Demand for mortgage services is driven by home sales and the refinancing that occurs when mortgage rates are low. The profitability of individual companies depends on volume, interest rate spreads, and efficient operations. Large companies have big economies of scale in operations. Small companies compete successfully by funneling mortgages to the large companies. The industry is capital-intensive: annual revenue per employee is about $300,000.
Opportunities
Reverse Mortgage Securitization - Reverse mortgages, through which senior citizens release the equity in their homes into cash, are coming back as a means for seniors to supplement their...
Business Challenges
Volatile Loan Demand - Mortgage applications and refinancings can be volatile due to economic conditions, changes in taxes laws, and government stimulus programs. High numbers of mortgage defaults can...