MReport June 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 39 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Closing Costs, Interest Rates Factor Big in Lender Choice A survey finds that 98 percent of Americans see interest rates as their biggest concern when choosing a mortgage lender. I nterest rates and clos- ing costs weigh heavily on consumers' minds—par- ticularly when choosing a mortgage lender. In fact, according to a recent study by Utah-based Ally Home Loans, 81 percent of Americans who've had a mortgage or plan to have one in the future say total closing costs would play a big role in their decision. Nearly 100 percent of all surveyed said interest rates were a factor. "Without exception, Americans of all ages and regions feel inter - est rates are an important factor in securing a mortgage, with 98 percent noting it as an important factor in their decision of which lender to choose," a release from Ally stated. "This was followed by 96 percent saying closing costs as very/somewhat impor - tant, while 93 percent indicated a reputation for excellent customer service and convenience was important as well." Only a mere 37 percent of those surveyed said they were satisfied with the mortgage process, while 15 percent weren't satisfied at all. Nearly 50 percent of those unsat - isfied with the application process said poor customer service was to blame. Poor communication, closing costs, and too-high interest rates were also factors. In total, 39 percent of consum - ers—ones who previously had mortgage loans and were dissatis- fied with the application process— said closing costs were too high. Another four in five consumers said a $500 incentive toward clos - ing costs would influence which lender they chose to work with. In response, Ally is now of- fering a $500 promotion toward closing costs. "We are very excited to be expanding our product suite at Ally Bank," said Diane Morais, President of Consumer and Commercial Banking Products at Ally Bank, "and with the spring homebuying season ramping up, we believe the $500 promotion, along with competitive interest rates and exceptional service, is a great way to help our customers with their home financing needs." Ally's survey was conducted online by Harris Poll between March 28 and 30. More than 2,100 U.S. adults participated. Most Lenders Anticipate Jump in First-time Buyers A survey shows mortgage lenders are gearing up for a strong 2017, with an uptick in purchases by first-time Gen X and millennial buyers. C onfidence in the con- tinued strength of the homebuying market is high amongst mort- gage industry professionals who, in a new survey, indicate near unanimous belief that the final three-quarters of 2017 will bring increasing volumes of mortgage purchases led by Generation Xers and millennials. The mortgage market is expected to grow particularly fast among first-time homebuyers buoyed by perceived economic improvement, with about three in five surveyed lenders anticipating an increase in new homeowners entering the mar- ket, according to results of the 2017 Lenders One Mortgage Barometer. The Lenders One survey of 200 mortgage lending professionals aligns with a recent report from the National Association of Realtors (NAR) that found the share of sales to first-time home buyers grew in 2015 and 2016 to its highest level since 2013. The NAR report said first-time buyers accounted for 33 percent of the market in January and 32 percent in February. While the mortgage market is displaying strength, lending profes- sionals will need to tailor efforts to reach potential buyers who may be considering financing larger homes in anticipation of utilizing rental in- come to help offset consumer debt, which the Lenders One survey respondents cited as the highest risk factor for 2017 (41 percent). "Housing inventory remains limited, and interest rates have increased sharply since the elec- tion," said Bryan Binder, Chief Executive Officer of Lenders One. "To be successful in this environ- ment, lenders need to focus on the purchase market and new in- novation to replace lost refinanc- ing volume. Lenders must also focus on tools and solutions to help them improve operating ef- ficiencies within their businesses." The Lenders One Mortgage Barometer survey results indicate that lenders believe the great- est opportunities will be found among Generation X buyers (86 percent) and millennials (85 per- cent, up from 79 percent in 2016). Other prime homebuyers will in- clude non-traditional buyers in the rental and vacation home markets (84 percent, up from 70 percent in 2016); boomerang buyers, who can now qualify for a mortgage after undergoing a short sale, foreclo- sure, or bankruptcy (83 percent, up from 68 percent in 2016); and Baby Boomers (82 percent). The report indicates 93 percent of lenders now originate non- qualifying mortgage (non-QM) loans. The trend is strengthened by continued home appreciation, particularly in higher-end markets, and 91 percent of survey respon - dents expect significant growth in jumbo loan volume. The Lenders One Mortgage Barometer is the second an- nual survey by The Lenders One Cooperative, a national alliance of independent mortgage bankers, correspondent lenders, and sup- pliers of mortgage products. The survey was conducted by research firm Ebiquity between January 4 and January 14. TH E M R EP O RT | 53 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA The first full-featured, cloud-based appraisal software Fewer revision requests Create UAD compliant forms more easily with an intuitive interface that helps minimize errors, omissions, and revision requests. Save valuable time Start, edit, and finish appraisals at the property using one easy-to-use platform, available on desktop or tablet. Justify decision making Define and defend neighborhood boundaries and selected comps using heat maps that shade price / sq ft, school boundaries, and census tract. Complete more appraisals with fewer revisions in less than half the time and price To learn more or start a FREE TRIAL please visit

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