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.

As you know, the mortgage lending world was turned on its head last October with the implementation of the TILA-RESPA Integrated Disclosure. Indeed, the web has been inundated with TRID advice and analysis. Despite the coverage, there is one interesting development that?s been largely ignored: the Loan Estimate is not changing borrowers? behavior. We?ll tell you why and explain what it might mean for the future of TRID.

TRID Review

For those of you readers out there not familiar with TRID, we?ll give you a quick refresher. If you?re already an industry pro, please skip down to the section ?Why Aren?t Buyers Using the Loan Estimate for Comparison??

Since the Dodd-Frank Act became effective in 2010, the Consumer Financial Protection Bureau, or CFPB, has developed new requirements for the making fee estimates and disclosures prior to closing on a mortgage. Previous estimate and disclosure forms were consolidated, timelines were altered, and borrowers were given more time to compare the Loan Estimate and the Closing Disclosure. Naturally, the CFPB was concerned primarily with consumers, and lenders and loan officers were faced with a steep learning curve to become compliant.

The purpose of the Loan Estimate was to give buyers a more accurate depiction of the costs of a mortgage. Despite the CFPB?s best intentions, neither lenders nor real estate brokers are seeing customers use this tool to compare their options. As they say, you can lead a horse to water, but you can?t make him drink.

Why Aren?t Buyers Using the Loan Estimate for Comparison?

After receiving the Loan Estimate, buyers have ten days to search for a better bargain on a mortgage. After that, they must accept or decline the offer. The CFPB recommends that customers compare at least three separate Loan Estimates before choosing one. However,.

According to the chief executive of Quicken Loans, most buyers are not doing this. There has not been an increase in people shopping for Loan Estimates. He explains this may be because the buying process is long and exhausting enough without having to get mortgage estimates from several different lenders. If a company has a good reputation, or has been referred by a realtor or friend, buyers often feel confident they are getting a fair deal.

Paul Skeens, of Colonial Mortgage Group, echoes this sentiment. He says that hardly 5% of his clients utilize the Loan Estimate as a comparison tool. Another mortgage banker from the Seattle area states that he hasn?t heard of a single person who?s gotten a Loan Estimate with the intention of weighing it against another. Just because there is another tool, it doesn?t mean that buyers are taking advantage of it the way the CFPB recommends.

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Acuity National Title Solutions provides lenders and loan officers across the country with title insurance and streamlined closings. For more information on our 24/7 access to closing support and document management system, please visit our homepage.

A new survey of top mortgage originators conducted by the Mortgage Bankers Association suggests that multifamily and commercial lending numbers will increase substantially in 2016. This good news underscores other positive signs throughout the housing market. With an equity crisis in China causing global turbulence, housing is likely to serve as a safe haven for investments. Furthermore, pent-up demand caused by the recession is just beginning to give way.

The Numbers

With borrower demand comes the demand for lenders to make loans. One factor that?s likely to increase demand across the board is the many 10-year loans made in 2006 and 2007 maturing. The Mortgage Bankers Association found that among top mortgage originators:

? 90% expect mortgage originations to increase in 2016
? 50% expect a total increase of 5% or more
? 61% expect their own firm?s originations to increase by 5% or more

?Borrower Demand Remains High ? Borrowers have been jumping at the chance to take out loans, and survey participants are confident that will continue.

Strong ?Appetites? ? A full 100% of surveyed originators predicted borrowers to have a strong or very strong appetite for loans in 2016, and 97% expected lenders to have a strong or very strong appetite to make loans.

Predictions by Investor Group ? Loans from all major investor groups are expected to increase in 2016. The greatest projected increase is with commercial mortgage-backed (CMBS) securities. The following percentages represent the number of respondents who predict growth of more than 5%.

? CMBS ? 64 percent
? Pension and life insurance companies ? 48 percent
? Fannie Mae and Freddie Mac ? 43 percent
? Bank portfolios ? 41 percent
? FHA ? 27 percent

?Loan Returns – Loan returns are expected to remain moderate. Half of respondents characterized loans made in 2015 as low return, and only 30% said loans in 2016 would be low or very low return.

Loan Risk – Loan risk is expected to rise slightly in 2016. Just over half of survey respondents classified loans made in 2015 as ?medium risk.? Compare that with 41% of respondents expecting loans this year be ?high risk.? Last year, in the same survey, 31% of respondents saw their loans as high risk.

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Acuity National Real Estate Solutions is a national title agency that offers cutting-edge technology and an all-inclusive suite of services to help lenders streamline closings. For more information on title insurance, escrow services, and closing support from Acuity National Real Estate Solutions, please visit our homepage or contact us today.

Following a brief surge, interest rates on 30-year fixed rate mortgage loans fell 4 BPS (basis points) in the week ending January 8th. According to a survey of over 100 lenders administered by the Federal Home Loan Mortgage Corporation, rates now average 3.97% for 30-year borrowers who pay 0.6 discount points at close. While the 3.97% figure is a drop from the end-of-year 4.1% rate, it is still an overall increase from last year’s average of 3.73%.

Contributing Factors

The last several months have been bumpy for mortgage shoppers, and the recent Federal Reserve interest hike sparked speculation that mortgage rates would rise as well. However, since the Fed’s adjustment directly affects the national prime rate and not long-term rates, it should take a while for the rise to trickle down to borrowers.

Global concerns are also a factor for the American housing market. Concerns about the overseas economic market, such as a faltering Chinese economy and plummeting oil prices, have prompted a global equity selloff and a corresponding fall in Treasury bond yields.

Fluctuations Outside the 30-Year Mark

Conventional 15-year mortgages saw a two-BPS rise, attaining a nationwide 3.36% average with 0.5 discount points. 5-year adjustable rate mortgages saw a modest increase as well, climbing 1 BPS to 3.09%.

VA loan rates, which are extended to mortgage applicants with past military experience, are traditionally among the most cost-efficient options for borrowers. On any given day, a VA loan will beat comparable mortgage plans by 25 BPS ? and the effect is even more pronounced in 2016, with The Mortgage Report forecasting VA rates as low as 37.5 BPS below traditional plans.

What Rate Changes Mean For Lenders and Loan Officers

With the current low average rate, lenders and loan officers will see increased business from home shoppers. Even with an average 5% increase in overall home prices in 2015, the US housing market has seen brisk sales through the fall and winter. Furthermore, the Fed’s prime hike is generally seen as a vote of confidence for a strengthening economy, supporting the idea that the housing market can support a gradual increase in interest rates.

Lenders and loan officers may want to consider the Mortgage Reports’ prediction of increased popularity of zero closing cost mortgages. In this model, the lender agrees to pay the closing costs of the transaction in exchange for a small percentage point increase in the interest rate. Obviously, a careful analysis of cost-benefit is necessary, particularly with regard to closing costs (which can vary wildly state by state).

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Freddie Mac recently delivered its latest Multi-Indicator Market Index (MiMi), illustrating the progressing rebound of the national housing market. MiMi tracks and gauges the strength of the national housing market, as well as that of all 50 states and the top 100 metro areas. It blends Freddie Mac?s own data with local market data to determine the trends of single-family housing markets by examining a host of factors. The index uses three ranges to demarcate value: weak, stable, and elevated. Two states?New York and Kansas?and three metro areas?New York, NY; Minneapolis, MN and Palm Bay, FL?were upgraded to ?stable? status in the most recent report.

National Market Perspective

Currently, the national MiMi value sits at 81.9, revealing an overall market in the ?stable? range, with a three-month increase of +1.54% and a year-over-year improvement of +6.31%. While it has gone up 38% since its all-time low in October 2010, it continues to lag behind the all-time high of 121.7. Overall, 32 states and Washington D.C. fall in the ?stable? range. Last year at the same time, only 21 states and Washington D.C. had stable values. Additionally, 53 of 100 major metro areas are marked as stable, while only 29 were a year ago.

Biggest Market Improvements by Area

The biggest jumps by states over last month were New York, New Jersey, Florida, Oregon, and Colorado. By metro area, Allentown, PA; Tampa, FL; Cleveland, OH; Palm Bay, FL, and Las Vegas, NV fared best when compared to last month. Over the last three months, 43 of 50 states and 89 of 100 metro areas have shown an upward trend.

What?s Causing the Rebound?

According to Len Kiefer, the Deputy Chief Economist at Freddie Mac, the rebound has been primarily due to the continuing decrease in mortgage delinquencies and better employment figures. Steady buyer demand, robust economies, and above-average job creation in Western states like Utah have buoyed markets. Kiefer forecasts a modest rise in mortgage rates, but expects them to stay within historically low levels. As unemployment falls and incomes rise, he predicts robust growth in household formation, construction, and home sales.

Working with Acuity National Real Estate Solutions

As the housing market continues to improve nationwide, we can expect to see increased business for lenders and loan officers. Acuity National Real Estate Solutions is here to help meet that demand. We are considered one of the most technologically advanced title companies in the nation, offering clients a 24-hour portal where they can access, upload, and download files at any time. For more information, please visit our homepage.

After years of close-to-zero levels, the Federal Reserve has raised the Federal Funds rate by a quarter of a percentage rate to 0.50%, effective December 16th. This move is prompted by further signs of a strengthened economy, such as the reported 211,000 new jobs produced in November (exceeding economists’ expectations), coupled with a steady 5% unemployment rate. The question is this: what does the shift mean for lenders and mortgage professionals?

Loan Interest Increase for Big Banks

Lenders will mirror the Fed?s increase of the Federal Fund rate by raising their own loans’ interest rates. Big lenders like JP Morgan Chase, Citigroup, HSBC, and other announced that their initial increases would go into effect on December 17th, just one day after the Fed?s announcement.

Prime Gets a Boost

The prime rate, the figure commonly used to determine interest rates on interest-incurring debts like mortgages and credit lines, is the key figure to consider here. Prime is typically higher than the Fed’s funds rate, so the hike in the latter typically means a proportional hike in the former. In this case, the current 3.25% prime rate is expected to rise to 3.5%.

Financial experts say that as long as the economy continues to improve, Fed rates will continue to rise. The effects of these hikes will be felt over the coming months, but the current move is a promising first step for lenders and mortgage professionals alike.

As the Economy Goes, So Go the Rates

It is important to keep in mind that while the Federal Reserve is often thought of as having the power to control interest, their influence extends directly only to short-term rates. The typical 30-year mortgage is a long-term debt, which is under the domain of the 10-year Treasury Bond. Adjustable-rate, one-year mortgages are more correlated with short-term rates, but these make up a far less significant portion of the market.

The Federal Reserve is a powerful force in the financial sector, and their decisions affect all loans: mortgages, auto, credit, etc., but other market forces can have far more significant impact. In 2014 alone, concerns about economic shifts in Europe and China caused mortgage rates to vary by a whopping .76%, between 4.43% and 3.67%. In the end, long-term mortgages are more affected by the prospect of economic growth and currency valuation than Fed Fund rates.

Partner with Acuity National Real Estate Solutions

Acuity National Real Estate Solutions is a national title agency that prides itself on providing comprehensive services to lenders, real estate agents, and mortgage professionals to expedite the closing process. For more information about our team, please visit our homepage today.

In 2011, the online real estate database Zillow partnered with Yahoo! Real Estate to create the largest online real-estate advertising site in existence. The site now lists properties for sale, helps consumers find agents in their area, allows prospective buyers to search and compare mortgage rates, and gives sellers estimates on the value of their homes. Over the last four years, Zillow has managed to expand its reach by purchasing real-estate listing sites like Postlets, Buyfolio, and Trulia. Not to be outdone, Google has now added a mortgage comparison feature to its insurance comparison tool called ?Compare.? We?ll tell you what you need to know to set yourself up for success in today?s digital age.

Google Partners with Zillow to List Mortgages

People search for practically everything on Google, and it only makes sense that Google would try and enter the mortgage arena. To do so, Google partnered with LendingTree and Zillow. Compare has been up and running in the UK for some time and is currently in use in California. Soon, prospective buyers nationwide will be able to search for mortgages, read reviews, and compare loan rates on Google. This makes it more necessary than ever to get yourself listed on Zillow and LendingTree.

Does Google Compare Pose a Threat to Lenders?

Google is good at what it does, and there?s little chance that it will fumble with its mortgage comparison tool. Users in the UK and California are saying that Compare is simple, user-friendly, and multi-faceted. In the end, Google Compare should prove beneficial to those lenders that know how to use it?in much the same way that Google search is a boon to any business that invests in search engine optimization. Ideally, Google Compare will allow the best lenders to rise to the top and garner more business than competitors.

Setting Yourself up for Success

Because Google Compare draws the majority of its information from Zillow and LendingTree, lenders need to invest some time in getting to know those sites. If you haven?t already done so, sign up! With Google Compare, the average consumer will have easier access to online reviews and rate comparisons than ever before. This means that realtors and lenders must put more effort into garnering positive reviews online.

Title Insurance and Closing Services from Acuity National Real Estate Solutions

Acuity is a national title agency that uses the latest technological advances to provide lenders and loan officers with unsurpassed title insurance, rapid closing support, and leading-edge CFPB compliance. In the same way that Google Compare will become a one-stop shop for mortgage shopping, we at Acuity have made ourselves a one-stop shop for title insurance, closings, abstracting, and notarization. For complete information on Originator IQ, the lending industry?s best-kept secret, visit our homepage.

National Mortgage News recently spoke with some of the most successful loan officers in the nation to figure out their secrets to success. Oren Orken from Chicago?s Guaranteed Rate originated over 100 mortgages worth approximately $32 million in the past year, which placed him at #176 on the annual ?Top Producer? rankings. Below are Orken?s personal story, marketing strategy, and some keys to overcoming adversity he?s learned from his years in the industry. If they?ve worked for him, they may very well work for you too.

How Did You Get Your Start in Real Estate?

A Chicagoan through and through, Orken studied at DePaul University on the city?s North Side, earning an MBA with a concentration in real estate finance. He worked at a variety of companies before landing at Chicago?s Guaranteed Rate, including Bank of America Home Loans, Wells Fargo, Capital Funding Mortgage Co., and Perl Mortgage. If Orken?s success serves as any guide to aspiring loan officers, the message is clear: it?s OK to hop around from company to company until you find a good fit.

What is the Most Successful Marketing Strategy?

To capture new mortgage business, Orken began co-hosting open houses with real estate brokers. He would read through the list of broker open houses on Mondays and cold call the agents to see if they would let him co-host. Though the majority didn?t say yes, he picked up a couple of agents very quickly and they began sending him regular business.

How does one Address the Needs of the Local Market?

Because his particular area of service has lots of condos, Orken made himself an expert in the FHA and VA approval and exception process. When realtors have to deal with difficult projects related to condos, he?s become a go-to option.

How can one Overcome Difficult Loan Scenarios?

Orken describes working with a borrower who came to the U.S. from Spain. Because he had to work with human resources officials in Spain during Spain office hours, the project proved quite difficult. Rather than dragging his feet, Orken went above and beyond and helped fund the client quicker than most ordinary cases. The borrower appreciated the effort so much that he came back to Orken three more times?once for a purchase and twice for refinances.

What Lessons do Loan Officers Learn Over Time?

The most valuable lesson Orken has learned in his years as a loan officer is that you must take good care of your team. It?s a symbiotic relationship; when he does his part, his team helps him push his loans through on time so he can deliver to his customers and remain in compliance.

Working with Acuity National Real Estate Solutions

Acuity is a national title agency that works with realtors and loan officers to facilitate rapid closings. With recent changes to the disclosure process (TRID), timelines are more important than ever. Our cutting-edge process combines advanced origination technology with the traditional business virtue of thoroughness, expedience, and close attention to detail. For more information on how we serve loan officers, please visit our homepage.

We live in the information age. Every day we see computers, software, and algorithms automating tasks that were once reserved for the highly educated?are loan officers next? James Wang, a PhD student at the University of Michigan, crunched the numbers and came up with an answer.

Should Lenders Choose High-Tech Options to Replace Loan Officers?

Much can be said about the value of personalized service, but when it comes down to it, the decision involves money. Loan officers are an investment. Lenders invest in qualified loan officers because they?re required to analyze a plethora of data and make a judgment about a borrower. Naturally, if there were an automated process that could perform the same job, lenders wouldn?t hesitate to use the cheaper options. Recent technological advances in underwriting software demonstrates a method that looks well beyond credit scores to evaluate the creditworthiness of a borrower?but can they make the same subjective judgments as an experienced loan officer?

The Verdict

According to Wang, loan officers are still ?worth their salt.? Wang studied data that spanned 32,000 borrowers over the course of three years, 2010 to 2013. This lender specialized in making large, cash loans to individuals and small businesses. Their loan officers evaluated references, financial statements, credit scores, and employment records to make a decision about each loan candidate. So, the big question: was the job performed by the loan officers more or less valuable than what an algorithm would produce?

According to Wang?s calculations, each loan officer contributed an average of three times his or her salary in profits every year. Keep in mind that this is just an average?the decisions made by loan officers are subjective, and, therefore, some are bound to be incorrect. Several loan officers were unprofitable when compared to Wang?s algorithm, but others were many, many times more profitable.

Could a Better Algorithm Outperform a Loan Officer?

The nature of technology is progress, so it?s only a matter of time before a newer, better algorithm comes along that will finally replace loan officers, right? Not according to Wang. Because the algorithm is calibrated according to the borrowers? actual repayment data, the chances of success are somewhat limited. The decisions that lead to one loan officer?s failure are the same that lead to another?s success. If an algorithm could be developed to replace loan officers, a similar one could be used to make all the right picks on the stock market?and that?s not happening anytime soon.

Acuity Solutions

Acuity National Real Estate Solutions, LLC is a national title agency that works with lenders and real estate agents to facilitate hassle-free closings. For more information about our services, please visit our homepage.