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16 | M R EP O RT COVER FEATURE savings even with pensions going to the wayside," said Peter Butler, Executive Managing Director of Digital Operations and Platforms, Wipro Opus. This is an important consid- eration, Jingst said. While homes tend to appreciate in price (though maybe not at the recent high rates), autos and most other assets tend to lose value over time. "There's a lot of misinforma- tion and misunderstanding on the value that people build in their home over time and how they're potentially using that equity versus taking on additional credit card debt or even using it to start a small business," Jingst said. Owning a home also has tax advantages and stability—a prop- erty owner cannot evict a person or refuse to renew a lease—that an apartment does not have, Tobias added. However, some will opt to rent because they have been outbid on multiple proper- ties. Buyer's Remorse A new report from Bankrate has found that more millen- nials are experiencing homebuy- er's remorse after purchasing what was thought to be that home of their dreams. The study found that nearly two-thirds of millennial homebuy- ers have expressed some degree of regret. The survey found that the older the buyer, the less likely they were to have misgivings about their purchase after the fact. In all, 64% of millennial homebuy- ers (ages 25-40) have some regrets about their purchase, compared to just 33% of baby boomer buyers (ages 57-75). "Most of the regrets are money related," Jingst said. "Largely, homes are an appreciating asset. I think there is a lack of perspec- tive regarding the value that is being created in owning a home among newer homeowners. Yes, there are expenses, and many of them can catch an unprepared first-time homebuyer off guard. People with more life experience typically can see a bigger picture and understand the value their home is creating and have been able to capitalize on that value in various ways." Jingst added: from age 20-40, many life events happen that change an environment and prior- ities. A growing family, a change in career and income, even the events of the last few years made people think differently about the need for their home to also function as an office. Life changes often lead to priority changes that affect what you want and need from a living situation. The Question of Risk H ome prices have appreci- ated rapidly in the past, of course, like just before the "Great Recession." When market prices declined sharply, some lenders were left with upside-down real estate portfolios. Even this was not unprecedented; the same thing happened in the savings and loan crisis decades earlier, as interest rates jumped to 15% or more, while savings and loans were sitting on loans yielding far as low as 5%. Most lenders and servicers, however, do not see the same level of risk in today's market. Lenders are inherently in the risk business, Jingst pointed out. "They have to look at how they can offset risk and not take on undue risk. We sit down with them and we look at their current processes, their current programs, and how they're how they're taking advantage of different services available, including lien protection services and insurance products that protect them against unknown liens or judgments." Butler observed that "Lenders have to price for risk. And they can do it to a degree, unless something catastrophic that takes place. It's an absolute balancing act when you're trying to understand at what point will you be at the top of the market." Right now, even if a lender pulls back on mortgages, another lender will be there to fill the void, Butler added. "The good news is that the underwriting standards of today are far more conservative than they were during the last crash," said Matt Clarke, COO, Churchill Mortgage. "There was a double- whammy last time with rapidly rising home prices that nobody believed would reverse and some crazy loans like negative amorti- zation ... and no income/no assets loans that all came to a head." Others agreed that the rules ad- opted after the last housing crash are likely to keep lenders from taking on too much risk. Other recent boom cycles were driven at least in part, by "funky" financing like mortgage-backed securities and subprime loans, Melchiorre said. "That isn't the case today. Dodd-Frank has a lot of rules that prevent that type of lenient financing." "The underwriters are being very cautious," said Lynda Fazio, Area Manager, Homespire Mortgage. To continue to take advantage of the booming market without taking on too much risk, Clarke recommended: "Ask great ques- tions to your borrower, commit to helping them win long-term with money and their home and being an advocate that helps them buy a home right. Stick to sound lending principles and stay in touch with the families that trust you to help them with their home financing needs." Migratory Patterns "I f you are staying in the same market and just moving up, you will both sell high and buy high, unless you are a great negotiator and find the right situation," Clarke said. "Moving from one market to another, like perhaps Orange County, California, to Boise, Idaho, you may find a huge increase in affordability and put some cash in your pocket. With "Most Americans still have the vast majority of their net worth wrapped up in equity, and a home seems to be the best area of savings even with pensions going to the wayside." —Peter Butler, Executive Managing Director of Digital Operations and Platforms, Wipro Opus