In early April, a large group of influential technologists, bankers, service providers, CIOs, COOs, and CEOs met with mortgage industry leaders in Los Angeles at the National Technology in Mortgage Banking Conference. The gathering was filled with diverse conversations on many topics, but one question served as an overriding theme: how will the mortgage industry be rebuilt?

As a rare confluence of mortgage companies and technology-driven luminaries from a range of other fields, the event became an opportunity for lenders to face a vision of the future of their industry. If you weren?t there, here is a brief recap of some of the themes that stood out in three days of speeches and presentations.

Alternative Credit Models

The conference?s first two speakers, the CIO of Experian and the CEO of Tavant Technologies, got things started by highlighting the important role that alternative credit models are likely to play in the near future in the lending industry. Their other main point of discussion centered on the current and future challenges presented by regularly dealing with massive global data centers.

Completely Digital Mortgage Origination

One of the featured panel discussions focused on the goal of making mortgage origination a 100 percent digital endeavor. The CIO of Fremont Bank, the COO at Employee Loan Solutions, and the former CIO of National MI, led a group talk on the challenges and benefits of ?going paperless,? in general, and the all-digital mortgage, specifically.

The discussion raised many points of interest to lenders, including:

• Most consumers would experience real benefits from a fully digital mortgage origination process because lenders could provide a clear, binding decision earlier in the process.
• Lenders would benefit by being able to rapidly integrate asset, employment, and income information
• The lending process of the future is extremely likely to be a completely online experience built around digitally gathered and managed information

Better Leveraging of Technology

Throughout the conference, speakers expressed clear agreement that leveraging technology will be a necessary skill for all successful mortgage companies. Many presenters highlighted the importance of using technology innovation throughout the whole origination process, not just at the point of sale.

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On May 5, when the Consumer Financial Protection Bureau (CFPB) holds its next field hearing, the agency is expected to release its long-awaited proposal for the use of arbitration agreements in select types of consumer financial services contracts.

Last October, the CFPB first announced that it was contemplating rules calling for a ban on ?free pass? arbitration clauses by financial companies and banks aiming to prevent consumers from grouping up to sue for relief. According to a CFPB release, the hearing in early May will feature a statement from the agency?s director as well as testimony from some consumer groups, key industry professionals, and members of the public.

What to Expect

Experienced CFPB watchers have noted that the agency commonly uses field hearings as a venue to announce new developments, and proposed arbitration rules are the most likely subject. In the past, proposed rules announced at hearings have been in near final or final form. If that?s the case again, that would suggest new arbitration rules could be in effect by the end of summer 2017.

What?s actually at issue in the arbitration discussion is the clauses in financial service and product contracts that demand consumers take any disputes to an arbitrator instead of a court. Over the past six months, there have been indications that the CFPB is willing to propose a set of rules that cover a broad range of financial products, including checking accounts, payday loans, student loans, and credit cards.

No More Arbitration?

A 2015 study conducted by the CFPB found that consumers rarely understand arbitration clauses in financial service contracts. In some cases, failure to understand clauses may have dissuaded people from starting or following through with disputes. In response to the study, the agency said it was considering banning contract arbitration clauses that specifically prevent class action lawsuits. Soon after, the CFPB continued the march toward new rules by convening a review panel to collect feedback from the industry.

As observers have noted, the next logical step for the CFPB, based on all the statements and events that have led up to the May 5th hearing, is for the announcement of a ?de facto ban? on arbitration clauses.

Information for Lenders

Acuity National Real Estate Solutions provides lenders and loan officers the information they need to stay on top of key industry trends. We also offer an all-inclusive suite of title services made to reduce costs and streamline closings in today?s real estate environment. To learn more about our offerings, please visit our homepage today.

Once the object of derision among financial professionals, reverse mortgages have come into their own in the current financial landscape. As more and more homeowners choose this option to collect an advance on their equity and put off repayment until a home?s sale, the reverse mortgage is increasingly being seen not as a stalling tactic for the financially unprepared, but a vital tool in the savvy real estate investor?s strategy set.

Issue Background

Typically reserved for older homeowners, the reverse mortgage is a special kind of loan that taps into the equity, or accrued value, of a piece of real estate to provide the borrower with a steady income stream. Since the loan is based in already-existing equity, the bank can make calculations based on the property?s price appreciation, current mortgage terms, initial length and other related factors to create a loan that will not exceed the home?s valuation over its lifespan.

A few rules do apply: as mentioned, reverse mortgages are generally only given to property owners over 62. Additionally, no liens or encumbrances may be currently enacted against the property. If any such claims exist, the loan will first go to paying those off before being dispersed to the borrower.

Then and Now

So why the shift from ?fallback plan? to ?legitimate investment strategy?? A few different factors. First and foremost, the 2008 financial crisis did a lot in terms of normalization: as borrowers saw their retirement evaporate before their eyes, there was a mass scramble for solutions of all sorts. As reverse mortgages became more common, they became more publicly understood and thus more acceptable.

Another important shift was the Reverse Mortgage Stabilization Act of 2013, which mandated that a chunk of the equity ? about 40% ? was to be made unavailable until a year after the initial loan. The banking system also implemented an assortment of regulations that ensured reverse mortgage borrowers were willing and able to pay insurance and taxes on the property, as well as protecting spouses not on the loan.

Fitting Into the Plan

Acuity National Real Estate Solutions? team of financial and real estate professionals can act as a bridge between lender and borrower to streamline closings on a variety of transactions, from reverse mortgages to new home ownership and much more. Visit our homepage to find out more about our comprehensive suite of escrow, title, real estate technology and related services.

The first week of April saw long-term interest rates dip to the tune of approximately.125% ? not a precipitous drop, but when the worldwide economy has been teetering so close to zero, any shift can speak to potentially major consequences. So what does this mean for the global lending market? A simple hiccup, or a portent of things to come?

Instability on the Rise

The drop was accompanied by several other warning signs of instability, as the 10-year Treasury note (a fixed-rate debt obligation from the government to private holders) settled slightly under 1.75% and low-fee mortgages at 3.75%. While not disastrously low, these numbers don?t live up to the projections given for the post-Federal Reserve meeting market. Why? Overseas economic instability.

Overseas Forecasts

The European Central Bank (ECB) has been buying up bonds left and right, leading many to speculate about that the EU is facing ? or, worse, already in ? active deflation. The same story holds true in Japan, where rapid demographic shifts due to an aging populace have caused even more panic. China, however, continues to hold steady: financial analysts predict that its internal mechanisms are ultimately unsustainable, but not a cause for real concern at the moment.

What Lenders Should Know

For the first time since the Federal Reserve began to publicize their meeting minutes over a decade ago, the global economic market is a major factor in domestic interest rate policy. The two-year Treasury note, which is more sensitive to Fed fluctuations than its 10-year cousin, is predicted to go through at least one more hike this year. Lenders take note: this is a sign of greater faith in a strengthening domestic economy, and concomitant rise in mortgages. However, caution should be practiced with regard to overseas and/or production investments as the strong US dollar continues to nibble at America?s export industry and undercut domestic manufacturing thanks to cheap imports.

The Acuity National Real Estate Solutions team is here to provide you with cutting-edge financial and real estate resources, backed up by comprehensive title, escrow and closing services. Visit our homepage to learn more.

While it?s true that housing prices have largely recovered from the crash, and the housing market is on strong footing, regulatory burdens are still making it difficult for lenders, servicers, and investors to turn a profit. Lenders in particular are being forced to do more with less. If any lessons can be learned about the right way to adapt to today?s environment, it?s that investments in compliance result in huge returns. Industry leader Ellie Mae has made that investment particularly well, and all lenders and loan officers should take note.

Ellie Mae?s Success Story

When Ellie Mae was awarded the Market Influence award in 2014, their Encompass solution was processing 20% of all mortgage originations in the country. Their built-in compliance engine, Total Quality Loan program, was both critical and timely. With every new regulation handed down from Washington and the Consumer Financial Protection Bureau (CFPB), their compliance engine only becomes more valuable.

The Numbers

Between Q3 2014 and Q3 2015, Ellie Mae grew revenue by 61%, net income by 24%, and EBITDA 45%. These numbers reflect both added customer volume and increased company savings. Those savings were passed on to lenders, who flocked to Ellie Mae. On average, lenders could save $970 per loan, reduce per-loan origination expenses by $466, and increase ROI by close to 500%.

Why Compliance Matters

Lenders? primary concern isn?t CFPB enforcement; it?s the decreasing customer volume and increasing costs that come along with the bureau?s regulations. A recent survey conducted by the Mortgage Bankers Association saw mortgage lenders averaging just $493 in returns per loan in Q4 2015. That?s a 60% drop from the $1,238 average in Q3 2015. Production expenses have also increased nationwide. In Q4, average production expenses per loan rose to $7,747?the highest levels since 2008.

Acuity National Real Estate Solutions: Your Partner in Closing Compliance

Acuity National Real Estate Solutions is a national title insurance company that offers cutting-edge technology to help lenders and loan officers reduce cost and turnaround time. Besides our many title products, we offer a 24-hour closing hotline and a client portal for easy document management. For more information on our closing solutions, please visit our homepage.

Nowhere has the US economic recovery been steadier than housing?which makes sense given it was among the hardest hit by the financial crisis of 2007-2008. But recent big gains have made some wonder if it?s too good to be true. Today we?ll look at both the cynical and optimistic views of the housing market to see if fears of a new housing bubble are misplaced.

Rising Prices & Easing Credit

All things considered, home prices are rising unusually fast across the country. In Dallas and Denver, home prices rose 18% and 20% over the past two years, surpassing the 2006 peak. Average home prices in many Western cities, like San Francisco and Seattle, are inching closer to their 2006 peaks as well. On a broader scale, home prices have risen 10% nationwide.

This all comes as credit conditions appear to be loosening. Ellie Mae?s average credit score of approved borrowers fell below to 719 in January?well below the average of last year. Put all these factors together, and it?s no wonder many people are nervous that we?re heading down the same road that took us to 2007 and the collapse of the economy.

A Deeper Look

Looking at one or two trends alone, it may appear obvious that we?re in the midst of a housing bubble. But to get a clear picture, all of the data needs to be taken into account.

Credit Access

Though credit has eased somewhat of late, it?s worth noting that we?re coming out of a long period of overly stringent credit conditions. Today?s mortgage approval process is worlds away from the easy subprime approvals of the bubble years. Credit scores for Fannie Mae-backed mortgages are between 740 ? 750 compared to the 710 ? 720 average during the bubble. Average credit scores for FHA mortgages are also up 40 ? 50 points compared to the bubble years.

Equity

Total home mortgage balances grew in Q4 2015 for the first time in 9 years. Debt currently sits $1.5 trillion below the 2006 peak.

Construction

During the peak of the bubble, there were an average of 1.9 million new homes constructed every year. Over the past four years, the average has been less than 1 million a year.

Compliance & Streamlined Closings from Acuity

Acuity National Real Estate Solutions is a full-service national title insurance company offering numerous closing and title products. We are proud to work with lenders and loan officers across the country to streamline closings, reduce costs, and increase compliance. For more information on our client portal for document organization and our round-the-clock closing hotline, please visit our homepage.

In a speech to its Consumer Advisory Board, Richard Cordray, the director of the Consumer Financial Protection Bureau (CFPB), put forth nine goals to guide the Bureau in the coming years. After TRID and increasing CFPB actions against mortgage lenders in recent months, many are surprised at how little time Cordray spent discussing mortgage regulation in his speech. Today we?ll give you a rundown of the new areas of focus for the regulatory agency, and explain why online marketplace mortgage lenders may be the CFPB?s next target.

• Mortgage Regulation ? With a value of $10 trillion, the mortgage market is the largest covered by the CFPB. Despite TRID, half of all mortgage shoppers are not comparing rates. The CFPB will focus on getting mortgage servicers to encourage borrowers to shop around.
• Student Loans ? Currently, there is close to $1.2 trillion in student debt spread across 40 million customers. Over 25% are struggling to make payments, and the CFPB will continue to work with the Department of Education to align servicer incentives with consumer outcomes.
• Consumer Reporting ? About 29 million consumers lack a credit report, and 19 million more have insufficient info for a credit score. The CFPB wants more accurate and effective data and dispute management. They will hold institutions accountable for remedying any deficiencies.
• Small Business Lending ? With a market over $1 trillion serving 28 million small businesses, no federal agency currently collects comprehensive data on small business loans. The CFPB plans on assembling a small business lending team for market research, data collection, and infrastructure implementation to analyze complaints and enforce compliance.
• Consumer Education ? Only 17 states require high school students to take a personal finance course. The Bureau wants to create consumer financial decision-making tools to provide consumers with better resources.
• Open-use Loans ? Open-use loans are defined as any credit product that is offered without expectation of use for a specific purchase, including credit cards, overdraft products, payday loans, auto title loans, and installment loans. The Bureau aims institute rules that promote transparency and protect consumers from debt traps, deceptive marketing, and illegal debt collection practices.
• Debt Collection ? Debt collectors lack the incentive to conform to the legal protections afforded consumers, and the CFPB intends to ensure collectors maintain accruable records and collect debt legally.
• Institutional Accountability ? Congress has granted the CFPB authority to regulate the use of arbitration clauses, the goal being to institutions accountable for unlawful conduct and give consumers the ability to effectuate their rights.

The Next CFPB Target?

On March 7th, the CFPB released a consumer bulletin regarding marketplace lenders, who offer a variety of online loans, including installment loans, mortgages, student loans and auto loans. The CFPB has been collecting complaints about marketplace lenders under general categories like ?Mortgages? and ?Student Loans?. Now, the CFPB will create separate categories specifically for marketplace lenders?the goal being to let marketplace lenders know the CFPB has its eye on them.

Acuity National Real Estate Solutions is a national title agency offering lenders and loan officers a 24-hour portal where they can access, upload, and download files at any time. Our goal is to provide individualized service and increase CFPB compliance without sacrificing efficiency. For more information on how we streamline closings, please visit our homepage.

According to Fannie Mae, most lenders expect to expand their businesses for the remainder of the year, and few are reporting plans to downsize. Out of these lenders, a majority will be increasing offices and lenders, or maximizing marketing efforts to achieve their targeted growth goals. While most businesses are planning for success, they identify problems with compliance as their biggest concern, followed by concerns over volume decrease risk.

Continue reading to learn about trends in 2016?s housing market and how most businesses are mapping out their strategies for success.

2015 vs 2016

2015 was a very strong year for the housing market. Home sales and housing starts were measured at their highest growth rates since the housing crash in 2008. Home appreciation was also strong, which influenced the increased number of mortgage originations purchased last year. Lenders were also able to benefit through refinancing since mortgage rates were lower than normal.

Lenders will have a harder time this year because mortgage rates are likely to rise as a result of the Federal Reserve normalizing monetary policy. It?s predicted that this year will be a good one in terms of home sales, home prices, and new construction. As interest rates increase, there will be fewer refinances and single family mortgage originations, so competition among lenders will be more heated.

Lenders will need to work harder and smarter this year to be successful.

Origination Strategies

Over 88% of lenders plan to expand their originations this year. Getting more business will either be accomplished by opening up more branches and increasing staff, or by expanding marketing efforts. Compared to the past, more lenders are emphasizing gaining new borrower segments and growing their online lending capabilities, which allow consumers to place orders online. Fewer lenders are formulating new mortgage products in order to attract more business.

Servicing Business

Regarding mortgaging service business, a majority of lenders are attempting to grow in this area as well, with only 2% reportedly planning to downsize. The primary reason for expanding into mortgage servicing is to increase revenue and profit. Secondarily, lenders hope for cross-selling opportunities for their other products or to hedge against the predicted decrease in originations.

Risk

The top risk concerns this year, from highest to lowest, include CFPB compliance, volume decrease, credit, operational, repurchase, interest, and fraud risk. Compared to last year, CFPB compliance risk is still the top concern, while the concern over a decrease in volume has cooled off significantly. Operational risk is higher, whereas the other form of risk is comparable.

Lenders should choose three of these areas and focus on how to proactively prevent issues in these areas.

To help you thrive in 2016, Acuity National Real Estate Solutions offers nationwide coverage, a 24-hour portal to access, upload, and download files, and other cutting-edge online tools. We use technology to streamline closings and increase compliance. For more information, please visit our homepage.

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.