May 2016 - Rise and Fall

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 57 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 ANALYTICS THE LATEST The Hurdles of the Closing Table Survey finds mortgage process, closing times are big concern for buyers. T he homebuying process still troubles many borrowers of all de- mographics due to the complexity associated with the mortgage application process. A new survey from Digital Risk of 1,002 Americans between the ages of 18 and 54 found that first-time homebuyers are strug - gling with the mortgage loan process. The results found that 100 percent of respondents said the mortgage process was not "smooth and on time." Fifty-three percent of those surveyed blamed increasingly rigorous regulatory environments as a top concern due to longer closing times. Digital Risk also found that those surveyed indicated mixed signals about the overall health of the economy. The report showed that 83 percent of respondents are "as confident" or "more confident" in their ability to make mortgage payments compared to last year. Meanwhile, 43 percent reported having little or no confidence in the economy. Technology is yet another obstacle in the way of home - ownership for many Americans. According to Digital Risk, 72 percent of 24 to 44 year-old respondents are more likely to use smartphones for banking and transactions such as payments, while 55 percent of this age group prefer to conduct mobile banking with their mobile devices. "Technology solutions that stand to make the process more efficient only can gain momentum when buyers are reassured that they are not sacrificing security for speed," said Jeff Taylor, Digital Risk co- founder & managing partner. Taylor added, "This data rein - forces the fact that the younger prospective homebuyers are much more open to managing these transactions via mobile banking. The demographics of home own - ership are changing, and technol- ogy must adapt to suit the needs of these emerging buyers." Millennials are more comfort- able than older generations with mobile mortgage technology, but Digital Risk found that a steep learning curve still exists when it comes to getting used to an automated process. "The development of new tech - nology has always faced a learning curve," Taylor said. "We believe that financial institutions have an opportunity to be on the cutting edge of new technology, allow - ing them to capture market share among tech-savvy Millennials." Taylor continued, "It's a mat- ter of trust. Consumers are more comfortable with technology when it is associated with a lender they already use. This reinforces the role of reputation and risk management as critical to the success of financial institutions. In the mortgage space in particular, companies with a strong track record stand to benefit from the rise of mobile tools." Buyers Gain Confidence Through Technology More than two-thirds grade themselves an "A" or "B" in the homebuying process. T he mortgage industry has made huge strides in terms of technological advances, offering homebuyers the opportunity to search for, tour, and make offers on homes all from digital platforms. Potential homebuyers are taking their search online, where they are conducting much of the mortgage process on their own. A survey of 1,000 potential homebuyers by found that consumers are confident in the economy and their own understanding of the mortgage process, which suggests they are becoming more self-reliant with the home buying experience. The survey found that 69 percent of respondents gave them - selves an "A" or "B" grade when it comes to understanding the home buying process, indicating their confidence in their ability to self-navigate the real estate market. According to the survey responses, 73 percent of survey respondents indicated that they would use online sites to search for properties, 53 percent said they are inclined to book home tours online, 43 percent would consider online financing for a product, and 27 percent would make a purchase offer online. "Consumers are heading into the spring home buying season with a positive outlook, according to our findings," said Steve Udelson, president of "Home buyers also indicate a willingness to go online and handle more elements of the real estate process themselves in order to save time and money–a trend we expect to continue this year and beyond." In terms of the housing economy, the survey found that 80 percent of buyers are confident that the 2016 home buying environment will be "as good as or better than it was five years ago." In addition, 92 percent say that mortgage interest rates are "somewhat to very important" to their decision on when to buy. A similar online survey from Chase mortgage, titled "Insights from the Mind of the Modern Homebuyer," found similar results. According to the survey, 68 percent of consumers are starting the homebuying process on their own, with over 50 percent turning to a mobile device or online to do it. Chase stated that digital outlets are changing the way that Americans search for homes and "more people [are] taking a do-it-yourself approach." 100% 100 percent of respondents said the mortgage process was not "smooth and on time." — Digital Risk Survey

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