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Mortgage Lenders Will Seek Competitive Edge through Better Customer Service and Reduced Time From Origination to Closing
March 21, 2016
Lenders Signal Caution about the Non-Qualified Mortgage Loan Market
ST. LOUIS, March 21, 2016 – A large majority of mortgage lenders say better customer service (77 percent) and improving the time from origination to closing (71 percent) are very important to being competitive in 2016, according to the Lenders One® Mortgage Barometer, a new survey of 200 mortgage lenders conducted by Lenders One.
“Mortgage lenders are looking at 2016 as a year in which they will move toward a more growth-focused business strategy,” said Daniel T. Goldman, Interim Chief Executive Officer, Lenders One. “However, some external factors such as rising interest rates and a complex regulatory environment will continue to temper the pace at which mortgage lenders seek to expand.”
Mortgage Lenders Cautious of High-Risk Borrowers
The non-qualified mortgage loan market faces a mixed appetite from lenders. Less than two-thirds (64 percent) of survey respondents say they originate non-qualifying mortgage loans, with less than one in five (18 percent) reporting that they frequently do so. Among lenders who do originate non-qualifying loans, only about one-half (51 percent) say they are extremely or very likely to originate these types of loans in 2016.
Regulatory Compliance and Interest Rates Weigh on Mortgage Lenders
The two areas mortgage lenders rate as having the biggest impact on the mortgage lending business in 2016 are compliance with regulations and rising interest rates, which are noted as being extremely or very impactful by 73 percent and 68 percent of lenders, respectively. The compliance-related areas on which mortgage lenders are most focused include:
TILA-RESPA Integrated Disclosure (TRID) (41 percent)
The Home Mortgage Disclosure Act (HMDA) (24 percent)
Consumer Financial Protection Bureau (CFPB) audits (14 percent)