December 2015 - Fortune Tellers

TheMReport — News and strategies for the evolving mortgage marketplace.

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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 ORIGINATION THE LATEST 40 | TH E M R EP O RT Mortgage Origination Shifts to Digital Channels SURVEY SHOWS CUSTOMERS MORE CONTENT SUBMITTING AND RECEIVING UPDATES THROUGH DIGITAL CHANNELS. S atisfaction among mortgage customers has improved overall this year as lenders have shifted their focus to developing functional digital channels and improving operational efficiency. The J.D. Power 2015 U.S. Primary Mortgage Origination Satisfaction Study released in November determined mortgage customer satisfaction from 4,666 respondents based on application/ approval process; interaction; loan closing; loan offerings; onboard - ing; and problem resolution. The survey showed that overall customer satisfaction with mort- gage origination averages 793 on a 1,000-point scale in 2015, up seven points from 2014. J.D. Power credits much of the increase to a 22-point jump in the application and approval process factor, which was influenced by improved perceptions of the speed of the loan process. Satisfaction is typically higher when loans close earlier than promised (866), compared to when loans close as expected (821), and when it takes longer than expected (658), the results showed. Quicken Loans came in first place with the best primary mortgage origination satisfac - tion for a sixth consecutive year, with a score of 850, up 15 points First-Time Buyers Hindered by Down Payments Most renters are putting about 30 percent of their monthly income toward their rental payment, which makes saving for a 10 or 20 percent down payment difficult. I n housing markets where home values are constantly rising, first-time buyers often struggle with coming up with a down payment and end up renting versus buying a home. Most renters are putting about 30 percent of their monthly income toward their rental pay - ment, which makes saving for a 10 or 20 percent down payment difficult, a new Zillow report showed. "In general, paying a mortgage is more affordable than renting, and has been for some time. Unfortunately, many current renters aren't able to realize the savings that come with home - ownership because as home values and rents keep rising, it's getting increasingly difficult to clear the down payment hurdle," said Dr. Svenja Gudell, Zillow's Chief Economist. This conflict forces first-time buyers and millennials to pursue other options when looking to purchase a home, like help from family or friends. The report showed that in 2014, 13 percent of home purchases were bought us - ing a loan or gift from friends or family for the down payment. Affordability of rentals worsened in the last year in 28 of the 35 larg - est metros over the past year, while mortgage affordability worsened in 18 of them, In 34 of the largest 35 metros, rental affordability is worse than the historical average. "It's not uncommon for a 20 percent down payment on even a modest home to represent savings of $50,000 or more in some areas," Dr. Gudell said. "And that number itself is a moving target, rising as home values escalate and harder to achieve as more money goes to landlords and less goes to savings. Using a smaller down payment is an option, but often comes with the added cost of mortgage insurance. Knowing this, it's no wonder that many current renters are waiting longer to buy a home and are turning to alternate sources, including friends and family, to help them scrape together a down payment."

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