50 states. This directly ties to what the Federal Reserve does nationally, even if we are in the private real estate industry. At the same time, local market variability plays a crucial role in determining real estate trends. While many lenders market themselves as “national,” the reality is that 95% of their portfolios are composed of local loans, with only 5% spanning broader regions. Why? Because nobody knows a market better than those who are in it.
held and sold loans provides financial stability and flexibility.
LEVERAGE TECHNOLOGY FOR SMARTER DECISIONS. A loan origination system (LOS) that prioritizes data-driven insights can help lenders track market trends and borrower behavior effectively. By fostering flexibility, maintaining sound underwriting practices, and embracing innovative tools, lenders can position themselves to thrive in any market. In real estate lending, expecting the unexpected isn’t just advice—it’s a necessity for long-term success.
ADJUSTING TO MARKET SHIFTS
Even though rates dropped across the board, just over 10% of states are still seeing rising rates. Sometimes lenders cannot combat rates because they must remain competitive. However, a common strategy among lenders is to increase the number of points charged to the borrower. For example, in Michigan rates dropped from 11% to 10%; however, the average points increased from 2 to 3, allowing lenders to maintain their overall take-home revenue. This illustrates how lenders adapt to market changes— shifting their pricing strategies to remain profitable despite rate fluctuations. Although perfect market predictability remains unattainable, adopting strategies that would have worked for successful lenders can help organizations lend with greater confidence. DIVERSIFY YOUR FUNDING SOURCES. Relying on a single capital provider increases risk. Instead, lenders should establish multiple funding relationships to ensure liquidity during market shifts. HOLD AND SELL LOANS STRATEGICALLY. Maintaining a balance between
ALEX KADDAH
Alex Kaddah has been at the forefront of leveraging cutting-edge technologies to drive innovation and efficiency within the industry. With a master’s degree in analytics and artificial intelligence and several years of hands-on experience, Kaddah has helped Liquid Logics implement advanced data-driven strategies and solutions that significantly enhance business operations. Before joining the family enterprise, Kaddah gained valuable experience as a Division 1 athlete, developing
IS IT POSSIBLE TO PREDICT THE MARKET? When it comes to predicting market trends, my Financial Investment 3000 professor taught us that top analysts spend 100 hours a week and get paid the big bucks to make financial decisions to outperform the market, only to get beaten by a monkey throwing darts at a dart board. That’s not to say you should go out and purchase a dart board, but there is some truth behind the logic. The last quarter of 2024 saw interest rates and loan amounts drop across the board, in 38 of
people and personal skills in a high-stakes, high-performance
environment. Outside of work, Kaddah is passionate about all things sports. If competition is involved, Kaddah will be there watching or competing.
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