One of the most respected leaders in today’s mortgage banking industry is Andrew Peters, chief executive officer of Frederick, Md.-based First Guaranty Mortgage Corporation (FGMC). Peters took time from his busy schedule to offer his views on where the industry stands today.
Q: How would you categorize the overall state of the U.S. housing market?
Andrew Peters: Better, but still very slow. We are still seeing a predominance of cash investors in the market and the true first-time homebuyer has not returned to the extent we’d like to see yet.
Q: Over the past couple of years, the mortgage banking industry has been placed under an increased regulatory regimen. On the whole, how has the industry operated under these new regulations and requirements?
Andrew Peters: The industry has done a great job keeping pace with the new regulations and implementation dates, but balance sheets are worse for the wear. Many small- to mid-sized companies are struggling with the cost of regulatory compliance and the compression of margins.
Q: There appears to be a revived interest in home equity lending. Is this a good sign for the industry?
Andrew Peters: Yes. It means the end buyers see a light at the end of the tunnel as it relates to home values.
Q: Going forward, what do you see as the biggest challenges facing the mortgage banking world?
Andrew Peters: Profitability and capital. The real challenge is whether it is possible for the majority of independent mortgage bankers to keep operating at the break-even level until the purchase market comes back and private capital brings non-agency products into the market.
First Guaranty Mortgage Corp. is online at www.fgmc.com.
Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.