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Maybe there is a little “happy” in this New Year. The latest housing market indicators all seem to be pointing in the right direction.
Although all the planets are not quite fully aligned, the outlook for housing is more positive than negative (Housing Market).
The National Association of Realtors reported that sales of existing homes rose almost 15% from November to December. With that, the percent of first-time buyers was 32%, up from 29% a year ago. That’s great news for housing; great news for lenders.
However, as it is in most cases, there is the proverbial flip side of the coin. With the increase in home sales, the inventory of existing homes on the marker, as of yearend, dropped about 12%, with the median sale price increasing to around $224,000, up about 7.6% over November. “The rules of supply and demand.” This may present some challenges to first-time homer buyers in 2016.
Some lenders may still be struggling with the challenges of TRID compliance, but it’s time for all lenders to start planning to capture their market share of the financing opportunities presented by the improving housing market.
TRID is a process flow, not a market factor. TRID will not affect “if and when” consumers decide to buy homes. The market and the economy will contribute to such decisions. Don’t allow TRID to stand in your way.
Lenders need to be prepared to take advantage of the new opportunities by preparing to service the needs of the new homebuyers. Figure out the needed process flow to comply with TRID, while servicing the home buyers, and get back to the business of making loans.
As an example, figure out how and when you wish to disclose the new Loan Estimate and the fees for the services a consumer may shop. You need to either disclose the fees (and develop a process to obtain the fees) from a service provider selected by the consumer or disclose the fees of the service providers on your list.
If you want to be more precise and use those of the consumer’s provider for your initial estimates, then you need a workflow to obtain that data before you issue the LE.
On the other hand, if you are not aware of the potential providers, and wish to disclose the fees from the providers on your list, you need not wait for any additional input/information. In this case, the LE may be issued immediately upon receipt of the application. Your call.
Either way is fine. You can always adjust these fees later if they are paid to a provider selected by the consumer that is not on your list. Such fees have no tolerance limits.
The idea is to develop a workflow to meet the needs of your intentions. Once done, determine how and where technology may help. Train your staff and get back to the business of doing business. The only difference between stumbling blocks and stepping stones is how you use them.
Don’t allow TRID to be the stumbling block that hinders your opportunity to take advantage of an improving housing market. Go out and make some loans!
