A million homes here, a million homes there. Pretty soon, we’re talking about a whole lot of home sales. Where is the housing market headed? It seems that MBA and Fannie have a slight disagreement on the issue (Housing Market).
Everyone is projecting a rise in interest rates. MBA forecast is for a rise as soon as December. Both Fannie and MBA forecast an uptick in the purchase volume of both new and existing homes. However, they also forecast a drastic drop in refinancing activity. Unfortunately, according to their predictions, the rise in purchase financings will not offset the drop from the refinance declines. Forecast for some clouds on the horizon.
So, what does it all mean? Well, let’s face it, we all knew that rates couldn’t stay this low forever. Although I believe they lasted much longer than first expected. That turned out to be good for the mortgage industry but not as good for the housing markets.
Once people refinance into a lower rate and restructure their debt, they have a tendency to stay put for a while to reap some benefits. This takes homes and potential move up buyers out of the market. A low-pressure front moved in.
However, with the economy improving, home values increasing, a forecast for some wage improvement, coupled with a rise in rents, some consumers may start looking to move up. First time home buyers may dip their toes in the water. That’s a good sign. As the housing market improves, so goes the economy. A forecast for a better climate.
Lenders should be poised to take full advantage of any increase in purchased home financing. Most lenders (who work with dependable technology partners) are now TRID ready. So they can march forward and begin servicing the new buyers.
Even with a slight rate increase, resulting from an improving economy, mortgage rates will still be at record low levels. All bodes well for mortgage lending. Sunny days may be ahead.
With the drop-off in refinancing, lenders need to concentrate they efforts on finding new purchase business and competition will be fierce. Lenders need to have the technology, tools and trained staff to provide consumers with quick access to information and applications, with the capability to move loans through the approval process quickly to meet projected closing dates. Most are warning of closing delays resulting from the new TRID compliance requirements. More clouds?
It will be the lenders that find the way to avoid the so-called “TRID delays” and meet the expectations of the consumers, Realtors and Builders and close their loans on time that will get ahead. That should be every lender’s goal.
Put aside all the talk of why closings will get delayed, and about the increased cost to the consumer for longer rate locks, and institute systems to get to the church on time. Let the sun shine…
The process hasn’t changed. Take an application, process and approve it, gather needed data and then close the loan. The big difference is the requirement for the new Closing Disclosure 3 days prior to the closing (consummation).
So, what’s the big deal? Many good lenders were already providing information to their borrower well in advance of a closing. Those who can do so will benefit from a better reputation and increased customer satisfaction resulting in more business.
Don’t use TRID as an excuse for poor service and don’t accept it as an employee’s excuse for not getting their job done on time. Like them or not, the new rules are here. Those who learn to embrace them and use them to their advantage will succeed. Those who don’t will be left with their excuses for failure.
Which will you be?