With interest rates on the rise, a scarcity of housing inventory, and the possibility of an impending housing crisis, what are the implications for the mortgage industry?

This panel brings together experts in mortgage, including John Paasonen from Maxwell, Arvin Wijay of Consolidated Analytics, and Chris Whalen of Whalen Global Advisors for a discussion on the state of the mortgage industry today, moderated by Daniel Cohen, Co-founder of Cohen Circle.

The panelists discuss:

• The impact of rising interest rates on commercial and residential mortgages
• The fundamental problems (and potential solutions) in today's mortgage lending environment
• How emerging trends in tech and AI will change the mortgage space
• Long-term impacts on housing affordability

Below are some highlights from the webinar, followed by a replay.

On the dynamics in today's mortgage market

You're seeing that the average DTI is dropping, the average loan to value is dropping, while the credit scores are maintaining fairly constant...so all of that sort of indicates tighter credit overall in the market, and makes it much more challenging for buyers to not just find a home to buy, but actually to qualify for that home for a lender to take the risk. - John Paasonen, Maxwell

I'm hoping, with a little bit of technology, artificial intelligence, robotic process automation, we are going to become more efficient. So we can become people-process-technology combined. How we can we be efficient and how we can be stabilize costs, because the lenders cannot carry this kind of fixed cost and lose money.  - Arvin Wijay, Consolidated Analytics

There's not much Refi business out there right now, which tends to be much less expensive and a big part of revenue. So the industry today, it's trying to survive on a very low amount of purchase business...I think we see a lot more restructuring, and a lot more M&A activity in the second half of the year. - Chris Whalen, Whalen Global Advisors

On the opportunities and challenges in new tech and AI

The opportunity to take [mortgage technology] to the next level, to save money on kickouts, save money on defaults, and put backs, save money on processing time and errors. The opportunities for eliminating costs and reducing losses are just enormous. And that's why it's such an exciting time still, for the mortgage industry. - Daniel Cohen, Cohen Circle

One of the interesting things is the new technology companies keep all the data. And I think that's going to become the industry standard. So all of the older tech and the rest of them, they're gonna have to run really fast to keep up with the expectations of the regulators in Washington. And the lawyers. - Chris Whalen, Whalen Global Advisors

Where we see the application for AI in the short term is around being an aid to the different participants in the manufacturing line...We've been testing this tool that automatically generates letters of explanation for a borrower...It produces the letter, but the borrower still has to review it, before they can submit it. How do we enable AI to filter the pipeline to identify borrowers most likely to convert to loans? For the manager, how do we give them natural language reporting? - John Paasonen, Maxwell

On what to expect in the next few years

2024 is going to be a reset year on the people who did deals between four and a half to 6% or slightly above, and there's going to be some reset, and then there's going to be some supply coming through the COVID era policies that's going to move some inventory into the market. So there's going to be some positive momentum, but we'll be cautious. - Arvin Wijay, Consolidated Analytics

There's so many other factors at play right now, whether it's the war in Ukraine, whether it's how much household wealth is held by baby boomers that are still spending and not producing, whether it's inventory, whether it's the Fed funds rate...What we're betting on is lenders will need help across the value chain of origination to get there, and many of them will say, this is the time for us to reassess how we're structured and how we actually do business - John Paasonen, Maxwell

The mortgage company of the future is going to be a repositioned dinosaur or a consolidated dinosaur, that's completely changed their workflow in order to make the whole entire process a lot cheaper. - Daniel Cohen, Cohen Circle

Full Webinar Replay: State of Mortgage