TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/328038
Th e M Rep o RT | 45 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t deal with as they work to make the closing process as painless as possible. "We talk to a lot of clients out there. I know they're working really, really hard," he said. "I think the biggest thing they're struggling with is interpretation." With lenders working in an uncertain market and cut- ting staff to ease cost burdens, Benson said the best strategy is for companies to "control the pieces they can control"—i.e., good practices and good technol- ogy partners. CFPB agrees, which is why the bureau also released guide- lines for its upcoming "eClosing" project designed to "provide valuable insight into how to im- prove the closing experience for consumers," Cordray said. Through the pilot program, CFPB says it hopes to evaluate whether electronic closings can increase efficiency and consumer understanding in order to mini- mize surprises at the closing table. In order to participate in the pilot, interested firms are required to submit proposals as a partnership between a technol- ogy vendor providing closing solutions and a lender utilizing those solutions. Specifically, the agency says it is looking for eClosing features that enhance consumer understanding, incen- tivize early document review, and facilitate error detection to avoid costly delays. down Payment Percentages continue to trend down Homebuyers are putting less down, pointing to increasing affordability. North CaroliNa // Average down payments for mortgages are on the decline, lending a little bit of relief for affordability- challenged homebuyers around the country. According to a report released by LendingTree, down payment per- centages for 30-year fixed-rate pur- chase loans fell in the first quarter to an average of 15.78 percent, down from just higher than 16 percent in the last quarter of 2013. At the same time, the com- pany found average credit scores for borrowers matched with lenders on its own network have dropped 6 percent year-over- year, opening up the credit pool a little more. "As the housing market improves and refinance activ- ity declines, lenders are adapting their guidelines to improve credit accessibility for borrowers," said LendingTree founder and CEO Doug Lebda. "Relaxed lending guidelines translates to a larger pool of qualified homebuyers that could boost the housing recovery." Out of the top 10 states offer- ing the lowest down payment percentages to borrowers, North Dakota reigned with an average percentage of 12.31 percent. At the bottom of that top 10 range was Idaho with 13.81 percent; most of the list fell below the 13 percent mark. At the far end of the spectrum, New Jersey took the top spot for the highest average down pay- ment at 19.36 percent, followed by New York, California, Connecticut, and Hawaii. Of course, some of the states with the lowest down payment percentages also happen to be the states with the lowest bor- rower health scores, as measured by LendingTree—while the opposite is true for those with higher percentages. HarP refinances continue to dwindle consumers less likely to refinance, according to recent data. WashiNgtoN D.C. // Amid continued rising home prices and rising mortgage rates, the number of refinances achieved through the Home Affordable Refinance Program (HARP) is declining, according to the Federal Housing Finance Agency (FHFA). Even a slight drop in mortgage rates to 4.3 percent for the month did not bol- ster February's HARP refinances. Representing 21 percent of all refinances the GSEs completed in February, 26,964 HARP refi- nances were completed over the month, according to the FHFA's latest Refinance Report. About 30 percent of HARP refinances this year have been for underwater homeowners— those with loan-to-value ratios greater than 105 percent. Close to one-fourth of these loans were 15- or 20-year loans rather than the popular 30-year mortgage that dominates the market. In February, 12 percent of HARP refinances went to home- owners with loan-to-value ratios exceeding 125 percent. Georgia holds the highest rate of HARP refinances as a percentage of total refinances so far this year. Forty-two percent of loans refinanced in Georgia in the first two months of the year were completed through HARP, according to the FHFA. Florida held the next-highest rate at 38 percent, and Nevada and Michigan followed with 34 percent of refinances completed through HARP over the first two months of this year. In total, 3.11 million refinances have been completed through HARP since the program's incep- tion. ORIGINATION LocaL Edition ORIGINATION Amid continued rising home prices and rising mortgage rates, the number of refinances achieved through the Home Affordable Refinance Program (HARP) is declining,