Tony Wake, CEO of Bell Bank, has spent a quarter century in the mortgage business and doesn’t plan to leave anytime soon.
“I have been with the entity for over 10 years and in the mortgage industry for over 25 years,” said Wake, who leads Bell’s mortgage division. “Once you’re in this business, you’d never normally get out, [so I’m] For life like a lot of people around me.”
After graduating from Concordia College in Morehead, Minnesota, Wake joined Bell Corporation in 2004. In 2013, after serving as underwriting manager, he was appointed as CEO of Bell Mortgage Company Bell Bank. Weick has been named twice in the “Minnesota 500” list of top business leaders in the state, according to his company biography.
In his current role, Weick is responsible for the overall residential mortgage functions at Bell, which has approximately $10 billion in assets and primary offices in Fargo, Minneapolis and Phoenix. He notes that the mortgage division is spread “across a larger swath of the country,” including the central United States and into the Southeast.
Given his years of experience, Weick is an essential source of information on industry trends. In the following interview, he talks about what 2022 might hold for interest rates, home inventory, new home construction and more.
Interview has been edited for length and clarity.
Q: What is your assessment of our position now in the local mortgage industry? Given the background of the pandemic and the state of the economy, are you optimistic about the start of the new year?
a: We have a sense of optimism, especially in terms of the buying market. We all knew that eventually the refinancing activity would slow down. And of course, when you look at the forecasts and the forecasters out there, it’s going to be a very drastic change in activity and scale as these refinancings dry up.
For us, we have always been more focused on the buying activity. So when we look at going into the buying environment, we see that as an opportunity for us, along with some expansion opportunities that we’re looking at.
Over the entire calendar year 2022 we’re still talking more likely to be high 3%, 4%, low 4% [interest rate] Domain. Traditionally, this is a really solid interest rate, and leads to great affordability. But it’s an important change in where we are.
We, like the rest of the industry, expect a downturn across the board. But at the same time, we think it’s going to turn into a really strong market based on the buying activity that the industry will continue to see.
Q: If you think back to the late 1970s, when we had double-digit rates, 4% still looks pretty good by historical standards, right?
a: without question. And I think the markets will adjust appropriately, especially the buying markets. People need to buy homes.
Even in the pre-COVID phase, the industry was struggling with affordability to a certain level, as well as inventory constraints in many markets, particularly at affordable market levels. It only got worse… the last year and a half.
The only silver lining that might be happening is this frenetic pace of activity happening – with stories of 20, 30 and 40 shows all rolled out in one list within 48 hours in several markets across the country – we’ve seen a slowdown or more balancing of this really starting in happening. But usually, to catch up with stock levels, historically anyway, it takes a long time. Not only do you have to meet the demand at the current pace, but of course you have to meet this demand in excess. It is believed that the pace of buying will remain very strong, but there are some positive signs that may start to strike more balance than we have been in the last couple of years.
Q: Do you have any idea where we are going to build new homes?
a: We do a lot of construction lending as a bank and as a mortgage entity. So we talk with builders a lot, enjoy the liveliness and watch the patriotic vibes.
We believe the new build will continue to be very robust. I don’t think it will go into business gangs due to supply chain issues as well as the cost of materials and, most importantly, labor shortages. This is the biggest piece that is already limiting production levels for many of our construction partners. But I think even with all that in mind, we’ll continue to see strong growth out there across the country.
Q: What is the most important thing that keeps people up at night in the mortgage industry?
a: In the next couple of years, I think everyone is looking at a very competitive environment and expecting to see it as organizations ramp up over the past few years, and now that pie is shrinking.
And this isn’t the first time anyone has seen him working in this industry in a few years. So, it has traditionally become a knife fight for a while here in credit availability, interest rate, margins and cost controls. All of these things come into play, and every organization will take the best steps they see for themselves to continue providing a great place to work, great services to their customers and all the tools and products their sales and operating staff needs.
Inflation is omnipresent, of course, and the mortgage industry and the mortgage production world are not immune to that either. Thus, it has been a trend that has been going on for many years. And we will continue to see it as an issue that everyone has to deal with moving forward.
And then the last thing is just the technology and the evolving consumer, how they use technology, their comfort working in a face-to-face environment not just from consumers, but from your referral relationships. It is not yet clear where that will all balance out.
Q: Any thoughts of parting?
a: This industry is flexible. I mentioned interest rates in the double digits years ago. So it can be difficult to look at the environment of rising interest rates, and the impact that will have on your employees, your employees, and the communities around you.
But frankly, even though we might be dealing with a slight rate hike, I think the market will figure that out and we’ll be in a very strong and attractive interest rate environment for a long period of time here.
So we feel good about where things are today and where things are heading. Ultimately, the pandemic and getting past these problems across the country is still a huge deal. We all have to be smart and make sure we make the right decisions for all of our employees and consumers.
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