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A recent Lender One survey found that many mortgage lenders are expressing confidence in the current housing market. About 62% of the lenders surveyed are expecting that mortgage lending for home purchases will increase by about 11% on average in 2016. That’s good news on the purchase front – but what about refi’s?
In another study, the American Enterprise Institute (AEI) International Center on Housing Risk found that the share of first-time homebuyers increased significantly in February 2016 over last year. The report further indicates that the first time homebuyer share has been increasing regularly year over year. More good news!
Coupled with these reports are the findings recently released by CFPB in their Monthly Complaint Report that complaints against mortgage lenders no longer top their list. Complaints about mortgages in February totaled 4,529. That is still up about 6% over January but Debt Collector complaints topped the list at 7,360. This time, it’s good not to be number one.
Some of this improvement may be the result of the new Dodd-Frank rules on QM, ATR, and TRID. Such changes have forced lenders to pay much more attention to the details and toward consumer education and service in the areas of both loan originations and loan servicing. It’s just good business.
Most lenders have become more comfortable with TRID and the related rules and requirements. There is still a way to go but lenders are getting back to the business of making loans. Just as they did not long after QM and ATR took effect. They are learning to play by the new rules and use them to their advantage.
Consumers, especially Millennials, are much more tech savvy. They don’t take everything at face value. They’ll check references and resources to determine if they are getting a fair deal, from a trustworthy company, when it comes to buying and financing their home. A lender wants to be that company.
Having the systems and capabilities to provide consumers with usable information about your company and products online will go a long way toward helping you compete and stand out from competitors. Consumer education, with employee training, will minimize problems and delays encountered during the loan process, getting your loans to the closing table on time, correctly. Pre and post-closing loan reviews ensure that what needs to be done is getting done the right way and timely. This all benefits the consumer, their Realtor, and the lender.
There is an opportunity to lend in 2016 and beyond. Neither TRID nor any other regulatory changes will stop it. They may make it a little more difficult and time-consuming but people will continue to buy and refinance homes. Be in the position to take advantage of these opportunities. Attention to your loan quality and compliance will help.
It’s no longer just a matter of volume and spreads. The ‘volume’ must be of high quality and in compliance with the law or the ‘spreads’ won’t matter.
