5 Mortgage Industry Trends Taking 2017 by Storm

Now that we’re more than halfway through 2017, let’s take a pause and reflect on the trends that have shaped our industry the most this year.

 

Trends by definition may seem fleeting, but it’s important for lenders and other mortgage industry professionals to stay on top of what’s current. Doing so ensures competitive business practices that will result in a modernized customer experience, successful adherence to critical regulations and maximized operational efficiency.

 

Here are 5 trends that are taking the industry by storm this year.

Mobile

There’s no denying that mobile is pervasive in today’s society. In fact, according to a report released by analytics firm Flurry, consumers spend up to five hours per day on mobile devices. Accustomed to the instant access and convenience mobile devices provide, consumers expect access to mobile mortgage capabilities from the companies they conduct business with. Their financial institutions are no exception.

Today’s lenders must extend user-friendly and intuitive mobile capabilities to their borrowers to provide a positive, convenient, and ultimately, competitive borrower experience. For example, borrowers should be able to easily view and sign mortgage loan documents from a smartphone or tablet so they have ample time to review them before the closing ceremony and have the utmost convenience about when and where they sign.

Compliance

If there’s one thing that’s certain, it’s that mortgage compliance changes have become an ongoing trend in the mortgage industry.

Already this year, the CFPB has finalized changes to TRID, which includes changes to the written list of Settlement Service Providers and when creditors for assistance loans can use Truth in Lending Disclosures. Additionally, Fannie Mae’s and Freddie Mac’s UCD requirements take effect and Congress is considering changes to the Dodd-Frank Act.

With how quickly the regulatory landscape changes, lenders and servicers should be vigilant about keeping an eye on regulations to ensure they always maintain compliance.

Technology

In today’s technology-rich environment, implementing the ideal technological infrastructure is crucial for mortgage industry professionals.

Lenders must transform their practices to a digital setting (if they haven’t already) to increase operational efficiency, minimize errors and provide convenient and modernized services to their borrowers. That means implementing a fully-integrated set of tools to comprehensively address electronic lending.

For example, the lender’s LOS and document generation engine should be tightly integrated for the automatic population of dynamic mortgage documents. The eSign platform should also be integrated so that generated documents are automatically delivered to the borrower and then recorded in the LOS for future reference once the borrower has signed.

Data

Since the use of technology to address consumer lending is only becoming more prevalent, the industry has seen many concerted efforts to standardize data and facilitate communication between the parties necessary to complete these transactions.

Two notable developments are the introduction of the Uniform Closing Dataset (UCD) for investor reporting and the optimization of MISMO SMART Docs® to reflect an XML format and expand these standards beyond the eNote.

Data standardization provides many benefits to lenders, so this is an especially promising trend for the industry. Working from a standardized dataset increases efficiency, reduces the margin for error as a result of manual data management and provides a record of the loan that all parties can access and understand, among many other benefits.

Housing Trends

As covered in a recent blog, Q1 of this year saw a slight increase in mortgage originations. However, a drop in refinances pulled down the total origination volume, disappointing many in the industry who expected to see a more significant jump.

Housing trends are influenced by a number of factors and shift rapidly. In fact, since that very blog was published, the Federal Reserve increased the federal interest rate by ¼ of a percentage point, a development that’s sure to affect the housing market.

It remains to be seen how the fed rate hike will impact the industry. Rising interest rates often suggest economic prosperity, which is promising for home purchases. However, a hike could also bring originations and refis down even further, since homeownership becomes more expensive. This is certainly a trend to keep an eye on!

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Mobile, compliance, mortgage technology, data and housing trends have all had a significant impact on the industry in 2017, so far. At a macro-level, planning your strategies for 2018 with these trends in mind will be key. We’ll continue to monitor the mortgage landscape and keep you advised of additional trends to consider.