After a year of change, trend acceleration, and endless ‘pivoting’, it’s time to take stock for a moment and think about what we’ve learned. As historically low rates sparked a refi boom and big moves in the housing market, many mortgage professionals have had their best year on record. After a year of unexpected success and unprecedented challenge, mortgage professionals should take the time to think about what we’ve learned and how the circumstances of 2020 will inform the industry into 2021 and beyond.

With that in mind, MPA spoke with John G. Stevens (pictured), chief revenue officer at SRE Mortgage Alliance Inc. Stevens, an industry veteran who’s made his reputation by thinking about the future, shared the three big forces that he believes are already changing the mortgage industry. They are: increasing role flexibility and the rise of dual-role real estate and mortgage professionals, the limitations of refinancing and the need for a purchase-centered approach, and a growing need to integrate human contact in a tech-enabled market.

In part two of this series, Stevens explains why, even though some originators did record business on the back of refinances this year, he thinks that businesses that aren’t built to be purchase-first will start suffering as the overall economic picture brightens and rates start to climb. He explained that refis, which are by nature finite and cyclical, can’t offer the foundation mortgage originators need and a career spent chasing them will not translate into meaningful growth.

“There’s a limited amount of water in the well,” Stevens said. “These homes can only be refinanced so many times. If you’re an honest and ethical originator then you are going to give your clients the best rate and rates are about as low as they can go right now. Rates will go up and while I love that people are being successful with refinances, they can’t lose sight of the fact that there’s a limited supply in the market.

“You know what’s not a limited supply: the need for individuals to experience the American dream and purchase a home of their own.”

Being “Built for Purchase” is a mantra and motto for Stevens’ team at SRE. They focus on it, even through refi booms like this year’s, because they want to avoid cyclical ebbs and flows and would rather build their business sustainably.

Read more: Finding an uncaptured market

While Stevens is advocating for a purchase focus, he’s also ringing alarm bells about the refi boom. He’s trying to inform the industry that the refi boom will come crashing to a halt soon and he wants to avoid the situation of past crashes when originators, bereft of their pipelines, asked ‘why didn’t anybody tell me this was coming?’ Stevens is sure it’s coming, and wants originators to behave accordingly.

He argues that originators who made money this year on the “easy food source” of refinance should take the opportunity to educate themselves more about the purchase market and add new skills to their roster, which could go as far as even obtaining a real estate license. They should take this time to refocus their relationships and build stronger relationships on the purchase side. Retool now, so you don’t have to retool when your refi pipeline has gone dry. Without steps like that, Stevens sees the potential for disaster ahead.

“The majority of the refinance business will go away, either through the fact that people have saturated the market or rates go back up, and companies will be shut down,” Stevens said. “As they are now, they can no longer stay in business when the easy food sources are no longer there. That’s why we are we are pushing so hard to avoid that. We’re saying ‘listen, this isn’t about our company, it isn’t about one person, it’s about the industry. If we work together and lift each other up now, then the industry is better because of that.’”