The Only Thing Constant is Change

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We hear this quite often but it is so true when it comes to the future of mortgage lending. Aside from the changes resulting from regulatory and agency requirements, the industry is evolving quickly into the digital age. What might the future bring?

National Mortgage News, as part of its 40^th Anniversary, has made some pretty bold predictions. In case you missed them here’s a recap:

1. Fannie & Freddie conservatorship will finally come to an end soon. Without a government charter or guarantee, they will become ripe for acquisition by a financial exchange.
2. Bankers will continue to exit mortgage lending to concentrate on more profitable business.
3. Mortgage Brokers will continue to grow and acquire a much larger share of originations. Some existing small to midsize mortgage bankers may shift to being brokers due to increased compliance costs.
4. The subprime market will return. Products will be offered once again to credit challenged borrowers that showing the income to qualify, at higher rates, albeit with a more cautious approach.
5. Expansion of the conforming loan credit box. A broader look at loan qualifications than just credit scores; trended credit data, with acceptance of alternative sources of income and assets.
6. Loan Officers will be replaced by online technology. The advent of the DIY loan.
7. Artificial Intelligence (the black box) will replace traditional underwriters.
8. Do not fear those Marketplace Lenders. Too much regulation in residential lending.
9. The e-Mortgage will be a reality sooner than you may think.
10. Appraisals, as we now know them, will become obsolete

You can read more detail on these predictions HERE.

Some pretty provocative stuff, eh? Things to which current lenders should be paying close attention. Look how far technology and innovation have moved other industries. Why would we think that mortgage lending would stand still?

What’s your take? Do you agree with any, some or all of these predictions? They should at least get the wheels turning.

Change is inevitable. Are you getting ready?

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.