TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/106030
feature ORIGINATION se r v ic i ng or ig i nat ion Sight & Insight a na ly t ic s Lending's future depends on taking the long-view—not looking in the rearview— according to DataQuick's Frank McMahon, and he's sharing his dynamic outlook on the strategies that are generating progress in today's marketplace. S e c on da r y M a r k e t By Abby Gregory A s DataQuick's executive chairman, Frank McMahon helped guide the company through current challenges by creating innovative development and execution initiatives to ensure the success of the organization's strategic priorities. Under his leadership, DataQuick has expanded its industry footprint through key acquisitions including the September 2012 purchase of Rels Title, and McMahon's expert direction has generated company growth, stimulating progress despite an unpredictable marketplace. Sharing his positive perspective with MReport, McMahon revealed the operational methods, pioneering products, and management approaches that are facilitating forward momentum in today's lending environment. 42 | The M Report M // Nationally, what lending trends both positive and negative are you observing in the marketplace? Mcmahon // While 2012 was a year of recovery in the housing market, 2013 may be more challenging. Last year we saw a 22 percent decline in completed foreclosures, a large increase in short sales, record-low interest rates, and improving supply/ demand dynamics. The increase in home prices is attracting new homebuyers and investors off the sidelines. While the increase in home prices and corresponding increase in confidence from homebuyers and investors is an absolute necessity for a long-term housing recovery, there are a number of headwinds the market will face in 2013. The MBA projects a 34 percent decline in refinance activity and a slight increase in mortgage rates. The spread between primary and secondary markets will likely narrow as volume decreases, reducing industry profitability in 2013. Offsetting these negatives, the new home and existing home markets are expected to continue their growth and recovery. Lenders and service providers are anticipating a more purchase-driven mortgage market in 2014 and beyond and implementing strategies to compete in that changing marketplace. However, the most significant headwinds will be the regulatory rules issued by the CFPB. These rules will shape the mortgage lending industry going forward and impose major implementation challenges to all industry participants. I am hopeful the final rules strike the right balance between consumer protection and encouraging broad lender participation. Longer term, the regulatory system needs to encourage lenders to make loans to a broader spectrum of borrowers for a robust recovery in housing. M // What key regulatory concerns are at the forefront for DataQuick's clients in 2013? Mcmahon // I believe the operational changes that will be required to meet the requirements of the various CFPB rules will be the biggest challenge in 2013. Obviously, the final definition of a Qualified Mortgage and the ability to rely on a safe harbor are critical issues. In addition, there are a number of other rules