Mortgage Industry Trends

They’re Here. Millennial Buyers Are Here!

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millennials-are-here-paul-revere-mortgage-buyersThe much anticipated, and long awaited, entrance of Millennials into the home buying market seems to finally be upon us.

This generation accounted for about 85% of the volume of home purchase, closed mortgages in January. Not surprisingly, many of these buyers chose low down payment mortgage programs for their financing.

In fact, Down Payment Resource, an entity that creates the opportunity for homebuyers, Realtors, and lenders to uncover programs that get people into homes, reported that, in January, 65% of first-time buyers, which includes many Millennials, put down 6% or less on their home’s purchase. This further indicates the need for lenders to offer these low down payment loan programs. Do you?

To assist homebuyers, we are once again seeing the emergence of down payment assistance programs. The intent is to help more low-to-moderate income consumers purchase homes to help stabilize languishing neighborhoods.

According to Rob Crane, Down Payment Resources’ CEO, these new buyers will stimulate the growth and revival of these neighborhoods. This helps to create more affordable housing that is sorely needed.

Lenders need to ensure that any such down payment assistance programs conform to and comply with FHA requirements when coupled with an FHA insured loan.

In addition to FHA, Fannie and Freddie also offer special, low down payment loan programs. Other programs like this exist such as the Wells Fargo yourFirstMortgage program.

Aside from a low down payment requirement, these programs also offer some relaxed credit and underwriting standards. All good stuff to help potential new homebuyers with limited down payment resources.

This resurgence is good for housing and lending, as long as the consumers qualified to purchase the homes are willing and able to afford the home and maintain the property.

Otherwise, we will continue to experience a downward spiral in the very neighborhoods we are trying to help. That ain’t good for nobody.

As usual, it’s up to lenders to ensure that doesn’t happen. Loans and applicants must be carefully analyzed to ensure quality, compliance, and the potential for continued loan performance. If so, these programs will help to create more home buyers and more affordable housing for them to buy.

And that’s what’s needed to keep a housing recovery going in the right direction.

Michael Vitali

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.
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Michael Vitali

About 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.
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