There will be many significant events occurring in 2015 that will greatly impact the way mortgage lenders conduct business. Some examples are as follows:
- Implementation of Collateral Underwriter (CU) by Fannie Mae – starting on January 26, 2015 Fannie Mae will begin providing CU risk scores, red flags and messages (free of charge) to lenders who submit appraisal reports through their Uniform Collateral Data Portal. Although use of CU will be optional, it is anticipated that it will become widely used and will help improve the overall quality of appraisal reports being used in connection with Fannie Mae loan transactions.
- RESPA/TILA Rules – the new RESPA & TILA rules will become effective in August 2015 and the new Loan Estimate Disclosure and Closing Disclosure (replacing the HUD-1 Form) Forms will be required to be utilized by all lenders.
- HUD/FHA Underwriting Handbook – the updated 4000.1 Origination through Post-Closing Handbook is scheduled to take effect in June 2015. There will be some substantive FHA underwriting policy changes that will be implemented when this HB takes effect – unless HUD reconsiders some of these policies based on feedback from industry groups.
- Fannie Mae’s 97% LTV Program – the full impact of Fannie Mae’s recently implemented 97% LTV loan program will be experienced in 2015. It is anticipated that Fannie Mae’s market share will increase – especially in this first-time homebuyer market.
- FHA Mortgage Insurance Premiums (MIPs) to be lowered? – as a result of Fannie Mae’s 97% LTV program – FHA’s market share should greatly decline in 2015 as nearly 80% of FHA loans are made to first-time homebuyers. These borrowers will be more attracted to Fannie Mae financing because of FHA’s high MIP structure. This reality will force FHA at some point to reduce premiums OR restructure them by reducing the annual MIP and increasing the up-front MIP (which can be financed).
- VA Loans – another banner year? – VA experienced their best year ever for loan production in 2014. This trend is expected to continue in 2015 as returning Veterans will continue to take full advantage of the excellent terms offered by the VA with respect to home loan financing (i.e. 100% LTV, low interest rates, streamline refinancing, etc.)
- Millennials Begin Purchasing Homes? – there are approx. 74 million millennials (those aged between 18-34) in this country. For the most part – millennials have been “on-the-fence” with respect to becoming home owners. Some deterrents have been large student loan debt and inadequate reserves. However, interest rates remain low and home values are affordable in many locations. 2015 may prove to be the year when the Millennials begin purchasing homes in large numbers – let’s hope so the housing recovery depends on it!
Stay tuned to the LoanLogics blogs and Newsletters to obtain our perspective on these and many other mortgage-related topics in 2015.
Happy New Year!