2024 Is Here: Now What?

January 31, 2024

With each new year comes a flood of articles pontificating on what is to come and what mortgage bankers should be doing about it . . .

               “Rates will be dropping, so you need to start hiring Loan Officers.”

               “Baby boomers will be downsizing, but will there be any inventory for them to buy?”

               “How much will the Lock-in Effect affect home sales and refinance activity?”


Do I think you should ignore them? No. Some of these articles actually contain information you need to consider when you are updating your business strategy. It is vital to understand the factors that are going to determine the size of our industry through various business cycles and to have a plan on how you will optimize your business during them. Remember, many of these predictions will be incorrect and out of your control. You can control the operational effectiveness of your company by remaining hyper-focused on the basics.


In my opinion, there are three basic areas that are essential for success in any market:

1.      Service Levels: Ensure that your customers (borrowers and originators) can count on you to provide the smoothest transactions available. The better your service, the less customers will focus on price.

2.      Cost-to-Produce: Measure everything! Controlling and reducing your cost-to-produce will contribute to your ability to provide competitive pricing, push through tough markets, and improve your bottom line.

3.      Differentiation: Define and focus on what you do best.


While I am sure that you could add to this list, I am not sure I can remember and effectively focus on more than three things at once.


Here are my thoughts on each of these areas of focus:


Service Levels

Document your process flows.

·        Scrub them for potential activities that could cause internal confusion or miscommunication.

·        Review each step that places a burden on your customer. Can it be eliminated or automated?

·        Ensure that your customers are being informed on the status of the service you have committed to provide.


Ultimately, no activity is too small. For example, if you are a retail shop with branch managers, then you need to scrub your AP processes. Branch managers will become very frustrated if they are getting calls from their vendors because bills are not being paid on time. Ask me how I know!


Develop a timeline to determine when you intend to create your process flows. Do not forget to build out a refresh schedule as well. Rinse and repeat!



Measure the cost of everything! Start with high-cost areas such as production and fulfillment. Be sure to include all your corporate activities, too. Where feasible, create operational metrics such as underwrites per day and monthly fundings per funder.


So, what are you supposed to do with this data?

·        Obtain as much industry benchmark data as possible. Consider participating in industry groups like the MBA and Stratmor Peer Group Roundtables (PGR).

·        Review your process flows for opportunities to eliminate redundant and low-value activities.

·        Routinely scrub your vendor list. Require that your internal business owners reconfirm the business need at least annually. Determine how you are going to renegotiate contract renewals.

·        Meet with outsourcers and other vendors to understand if they have viable solutions to reduce your costs.

·        Explore AI for opportunities to automate routine activities, but be super diligent on the cost/benefit component. Before you start, determine how you are going to measure success post-implementation. Itis so easy to simply implement and move on, just to realize later that all you did was increase costs.

·        Once you have implemented your cost-reduction initiatives, keep measuring to ensure that your goals are being achieved. Rinse and repeat!


Understanding your cost structures will enable you to control costs as your business grows, as well as facilitate cost-reduction efforts during periods of market contraction.



Challenge your leadership team to determine what your company’s core competencies are. What do you do better than most? Are you going to focus on superior service levels, best price, or a product specialty? What channel are you best positioned to succeed in? Operating in multiple channels might seem like a good business hedge, but be sure to understand how you are going to deal with channel conflict. Again, ask me how I know!


I hope these thoughts will serve as a reminder to stay focused on the basics while adjusting your plans to optimize expected market trends so that you can thrive no matter what 2024 throws at you.


Happy New Year!

Paul Hubbard

Fractional CFO Consultant
About the Author

Paul Hubbard is an industry veteran with more than 35 years of finance experience. He led the accounting, finance, and treasury activities for major lenders throughout his career, with a focus on optimizing profitability, streamlining financial processes to improve efficiencies, and implementing strategic planning to drive sustainable growth. Paul is now a Fractional CFO Consultant for CWDL, leveraging his finance leadership experience to help clients with both recurring forecasting and planning services, as well as projects such as M&A deal analysis, hedge and fair value considerations, accounting team coaching and mentoring, and more. Lenders can benefit from the wealth of Paul’s experience at a fraction of the cost of maintaining executive-level leadership.

Latest Blogs