In the recent past, homeowners looking for equity in their homes looked to a cash-out refinance, possibly influenced by the housing crash and record low interest rates. Over the previous two years, however, home equity loans (HEL) and home equity lines of credit (HELOC) originations have been on the rise, allowing homeowners reclaim equity in their homes as lenders regain confidence in the market.

Recent Progress

In the final three quarters of 2015, 976,000 new HELOCs had combined limits of $115.8 billion, each the highest marks in respective quarters since 2008. The total quantity is up 21%, and dollar volume is up 31% over the last three quarters of 2014.

Negative Equity Falling

The appreciation of home prices has sharply decreased negative equity, with the Federal Reserve reporting that homeowners have regained over $6 trillion in equity since the first quarter of 2009. At last count there were:

? More than 15.6 million borrowers with loan-to-value (LTV) ratios below 50%
? 18.3 with LTVs between 50% and 75%
? A full 30 million more who own homes in the clear.

?Job growth and rising consumer confidence have increased the amount of homeowners who are willing to borrow against their homes.

Interest Rate Questions

As of October 2015, according to CoreLogic, almost three-fourths of homeowners with a mortgage had an interest rate below 5% and the average rate on outstanding mortgages was 3.8%. Will these owners be willing to replace these low rates and refinance into higher rates to pay for major expenses including college tuition, a new car, or large medical bills, or will they tap into equity via HELs and HELOCs? Will they consider remodeling their home instead of selling and moving into a larger home?

The Remodeling Market Index (based on a quarterly survey from the National Association of Home Builders) has stayed above 50 for ten consecutive quarters, marking a lengthy duration of confidence in the market. The Census Bureau estimates $140 billion in spending on remodeling in 2015, the highest amount since 2005.

On average, HELOCs are larger than they were before the crash, $118,684 last year compared to $101,016 between 2004 and 2007. However, the utilization rate is down, 65% in 2015 versus a high of 72% in 2010.

New Credit Rating Strategies

Lenders and loan officers are using new propensity models to identify the best borrowers. Lenders are using an ?invitation to apply? approach as opposed to the old ?you have been approved? model of mass marketing. Customers with pre-checked credit who respond are entered into a propensity model to select top scoring homeowners who are also likely to take out a home equity loan in the following six months. This process saves resources by cutting some underwriting costs and leaving out unqualified and uninterested customers.

Acuity National Real Estate Solutions and Your Closings

As the housing market continues to recover, the opportunity to take advantage of market trends is increasing. Acuity National Real Estate Solutions can help. We are a national title insurance company offering high-tech closing services, a 24-hour closing hotline, and an online portal where lenders can access, upload, and download files at any time. For more information visit our homepage today.

People watching the Super Bowl this year were treated to a knock-down victory by the Denver Broncos ? but those looking to buy a house may have had something else grabbing their attention. A plethora of new firms took to the airwaves, broadcasting information about their mortgage offerings in a whole new light. The real estate industry has been famously slow to adapt to the Internet age, but this ad campaign may indicate the tipping point to more aggressive digital offerings from real estate professionals across the board.

The Ads

Rocket Mortgage, a new self-service tech offering from Quicken Loans, made the message crystal-clear by comparing their digital sales transition to the ones seen in the music, travel and retail industries. Online prequalification was a popular selling point, with SoFi (short for “Social Finance, Inc.”) promising more house for less headache and regional advertiser Guaranteed Rate touting their “anytime, anywhere” applications.

Although some viewers took to social media to decry the ads’ insensitivity to the lingering financial effects from 2008’s subprime mortgage crisis, the vast majority of the commercials were well received, prompting positive Internet buzz and increased chatter about mortgage options.

The Context

So what does this mean for the real estate industry in 2016? Despite the fact that the housing market is still recovering from the recession, and the mortgage industry is dealing with complex new regulation, many Americans are optimistic that the new digital offerings are a sign of good things to come.

The enhanced speed and convenience of online loan applications are a major client draw. In a 2015 survey conducted by J.D. Power & Associates, a whopping 36% of Millennial respondents (and 23% of those polled overall) said they were willing to pay a premium for expedited loan application processing. The same survey also revealed that the vast majority of respondents had experienced redundant and/or unnecessary document submission requests, further slowing down the process.

The Future

The key takeaway for loan professionals is that the online revolution is here to stay. What was once a drawn-out process is now being simplified by consumers’ ability to grant access to primary sources of data like bank accounts and credit history. Customers who complete their loan application through new media channels report significantly higher satisfaction scores than those who used mail or fax. The savvy real estate professional should be looking for ways to strengthen their digital presence and use new media tools for their services.

As far as title insurance and closing support goes, lenders and loan officers can come to Acuity National Real Estate Solutions for cutting-edge technology, document management, and 24/7 closing support. Visit our homepage to find out more about our title, escrow and closing services.

The Department of Labor (DOL)’s new proposed change to overtime regulations in the Fair Labor Standards Act could have a major impact on lenders and loan officers, say many field experts. If set into law, the new regulations could affect mortgage companies’ bottom lines in terms of both overall profit and human capital expenditures.

Issue Background

Under the current regulations of the Fair Labor Standards Act, workers are exempt from overtime pay if they meet two requirements: a salary of at least $23,660 per year or $455 per week, and job responsibilities falling under the DOL’s definition of “executive, administrative or professional duties.”

The proposed change to the rule raises the salary figure of the first requirement to $50,400 per year or $950 per week. If the change is passed, businesses will be required to pay employees whose make less than these numbers an overtime bonus of 1.5 times their regular rate.

Overtime regulations for white-collar workers were last updated in 2004, with a minor update in August of 2015 setting the $455 weekly figure. The Secretary of Labor has indicated that, if passed, the rule could go into effect as early as spring 2016.

Relation to the Mortgage Industry

Many banks and lending agencies have made efforts to apply administrative exemption to mortgage loan officers and appraisers, thus eliminating their right to overtime pay. However, the US Supreme Court definitively ruled against this argument in spring 2015. This means that if the new rule is passed, positions that were previously defined as exempt ? for example, lending specialists, branch managers, and commercial appraisers ? may need to be re-examined for compliance if their salary levels do not satisfy the new requirements.

How To Prepare

The DOL is expected to make their announcement soon, which means mortgage and lending operations need to prepare now. Law firm Hutchinson PLLC recommends starting with a thorough examination of the payroll to identify which employees are currently making between $23,660 and $50,400 per year and thus stand to potentially lose their exemption. Once the employees are identified, organizations should analyze their current overtime commitments and determine the next steps. If the employee consistently performs well and works over 40 hours per week, a salary raise to above the exemption level may ultimately save the organization money. Conversely, an employee whose salary needs to remain the same can have their job responsibilities reallocated in order to keep their workload to 40 hours or less.

Acuity National Real Estate Solutions is proud to work with lenders and loan officers across the country to streamline closings, reduce costs, and increase compliance. Visit our homepage to find out more about our client portal for document organization and our round-the-clock helpline.

Year after year, the three top concerns for mortgage lenders are quality, compliance, and cost: quality requires attention to detail and organization of data; compliance means meeting Dodd-Frank provisions; and reduced costs require taking advantage of the latest technological tools. Below are six strategies to help lenders and loan officers thrive in 2016.

1. Picture Success and Make a Plan to Get There

Evaluate your business where it is at this exact moment. Is your current output meeting production goals? Are you closing loans quicker than a month ago? Six months ago? Last year? Compare changes in production and closing times with internal/external pressures to identify areas for improvement.

2. Retool your Loan Onboarding Process

Onboarding includes receiving, sorting, and sending necessary documents via fax, mail, SFTP or HTTP. While you could assign an employee to complete these tasks, automating them can reduce onboarding times by up to 90%. The right technology can immediately digitize all documents and use automated document recognition (ADR) technology to get them where they should be. This is where the market is heading, and lenders and loan officers must decide if they?re going to get on board.

3. Automate Everywhere, Actually

In the past five years, loan production costs have increased. The key to lowering those costs lies in automating key steps in the loan process. With the right technology in place, labor-intensive tasks can be reduced up to 80%, driving down costs, wait times, and human error.

A few examples of automated process now available include: automatically assembled disclosure packages with built-in electronic signing, technology that extracts relevant data from loan documents for analysis and comparison, generating TRID tolerance checks, etc.

4. Choose Technology that Doesn?t Waste Time

Outdated technology takes a long time to load, stalls at inopportune moments, and lacks an intuitive user interface. The right technology will adapt to your speed and facilitate production. Be sure to choose a technology that is tailored specifically to lenders and has a good reputation.

5. Upgrade Communication Tools

While email has its place, there are better avenues of communication. Instead of working in within long email chains via an insecure connection, choose a technology solution that allows for collaboration with key partners. Acuity National Real Estate Solutions is a national title agency with a secure document manager where you can upload and share documents while automatically keeping a log of all activity.

6. Utilize Quality Control Software

Technology can also aid in proofreading documents. The best data management solution can extract data run it through a rules engine or checklist. Since this can be done as you are working, quality control becomes an integrated part of the process.

Acuity National Real Estate Solutions

Acuity National Real Estate Solutions is a national title insurance company that offers cutting-edge technology and an all-inclusive suite of services to help lenders and loan officers reduce cost and turnaround time. With a 24-hour closing hotline and a client portal for managing documents, you?ll have the tools and expertise you need on hand, at all time. For more information, please visit our homepage.