Mortgage Lenders Seeking Competitive Advantage Via Closing Speed, Customer Service
According to the Lenders One Mortgage Barometer
, a new survey of 200 U.S. mortgage lenders, 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.
"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)
"As consumers expect rapid response timeframes, mortgage lenders are highly cognizant of the competitive need to create expediency in the mortgage transaction process," said Daniel T. Goldman, Interim Chief Executive Officer, Lenders One. "The issue of timing is further compounded by lenders feeling pressure around the new timeline-dependent TRID regulations."