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Where the Real Estate Market is Headed in 2019: A Primer

Where the Real Estate Market is Headed in 2019: A Primer

2019 is going to be an interesting year for home buyers. High-dollar regions like the Bay Area, NYC, and other financial hubs show signs of slowing down. In less dense/regulated markets home builders are adding more inventory which should stabilize or lower prices in smaller markets. Lenders are under pressure from shareholders to reduce barriers to entry for home buyers, which will also have a positive effect on the ability for consumers to obtain home purchasing/refinancing credit. This credit easing is largely due to the fact that many experts are predicting double-digit declines in the larger housing market....

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How Valuations Can Improve Repeat Business

How Valuations Can Improve Repeat Business

By all accounts, the housing market is shifting into a different gear in 2019. The nation's economy remains strong, unemployment is at a record low and wages are increasing. Nonetheless, mortgage origination volume is shrinking, so lenders will need to fight harder for a smaller piece of the pie. This past fall, Fannie Mae's Mortgage Lender Sentiment Survey found that lenders reported a net negative profit margin outlook for the eighth consecutive quarter. Competition among lenders was cited as their biggest challenge. In a tight market, an obvious strategy is to find a way to generate more repeat business, whether that’s for home equity products, refinances, or purchase loans. One of the best ways to accomplish this is to partner with appraisal providers that are just as dedicated to providing an excellent customer experience as you are. Because they usually have limited contact with appraisers, consumers often feel detached from the appraisal process. This is not a problem when appraisals go smoothly, but very annoying to the consumer when they don’t....

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How to Reduce Costs While Protecting Quality

How to Reduce Costs While Protecting Quality

It’s no secret that loan production costs are among the highest our industry has ever seen. But with a more modest purchase market on the horizon, rising costs have become particularly stressful to bear. Of course, the primary driver of high loan costs is the length of time it takes to close a mortgage loan. And because it is one of the most time-intensive components of the mortgage process, the appraisal is a major factor in controlling costs. Appraisal problems have been known to delay closings and occasionally derail deals altogether, adding greater costs that lenders cannot afford. At the same time, diminishing home values, new appraisal exception rules and in some cases, a shortage of appraisers in certain markets are creating problems of their own. Collectively, these factors can and have been known to have an adverse impact on appraisal quality. With all of these things going on, how on earth can lenders improve valuation quality while reducing costs next year? Rest assured, it can be done. Here’s how....

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3 Things You’ll Need to Sell HELOCs in 2019

3 Things You’ll Need to Sell HELOCs in 2019

As the housing market heads into semi-hibernation for the holidays, it’s a perfect time to start planning ahead. Between rising rates and potential price ceilings in a growing number of local markets, there are a lot of challenges in 2019 that beg our attention. One particular trend we have been gearing up for is the increase in demand for HELOCs. The rise in home values and a strong economy are driving demand for home equity loans, especially lines of credit. HELOCs in particular could surge in the coming year, according to a recent TransUnion study that found home equity levels have surpassed their previous peak in 2006. The success lenders have in capitalizing on these products will have a lot to do with having the right valuation strategy in place. Here are the three things they’ll need most....

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3 Reasons Companies Succeed When Volumes Drop

3 Reasons Companies Succeed When Volumes Drop

After years of increasing origination volume, the mortgage market is finally starting to lose some steam. True, the U.S. economy is still doing well. But higher interest rates have taken the air out of the refi market, and wages have not kept pace with rising home prices, which is keeping the purchase market in check. Earlier this month, the MBA announced it expects overall mortgage originations to drop from $1.64 trillion to $1.63 trillion in 2019. A big reason for the decrease is rising interest rates, which the group expects to lead to a 12.4 percent fall in refinance activity. Of course, many lenders did not wait for the MBA’s latest numbers, having already seen the writing on the wall. Some companies have cited their business has fallen 20 to 30 percent year to date, and Chase, Wells Fargo and many non-banks are laying off loan officers, processors and underwriters. However, not everyone is doing poorly. Some are actually growing. In fact, we are. Our year-to-date volume is 25 percent higher than it was in 2017. And we can share the three primary reasons why we believe lenders and companies like ours continue to grow....

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Home Price Trends: What you Need to Know

Home Price Trends: What you Need to Know

The housing market is entering a very interesting stage. We’ve seen steady, year-over-year home price appreciation for more than six years straight. You would think this is good news, yet lenders have causes for concern. According to the latest numbers from the National Association of Realtors, home prices have risen 4.5 percent from one year ago. Las Vegas saw the biggest price increase with a 13 percent jump over last year, followed by Seattle and San Francisco with 12.8 percent and 10.7 percent gains, respectively. Meanwhile, the median price for an existing single-family home in July stood at $269,000, the highest median price on record. With only a few exceptions, it remains a fairly strong market. But this year, price gains began to slow. As interest rates begin to rise, transaction volume is slowing, which is placing extra pressure on lenders that are already dealing with increasing production costs. Below are three important lessons from the most recent housing figures, as well as some thoughts about how lenders can catch a break in a market that seems to be creating one challenge after another....

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8 Things Your Clients Should Know About Their Appraisal

8 Things Your Clients Should Know About Their Appraisal

In an industry that is so reliant on positive relationships between originators and their customers, it’s surprising how many lenders fall short of providing great customer service at the time of the appraisal. Some don’t consider this their job, and that misconception can be costly. The appraisal is a critical part of the mortgage origination process, and therefore an important opportunity to cement a good relationship with borrowers. Since most borrowers don’t fully understand what’s involved in the appraisal process, a savvy loan officer is wise to educate customers on what they can expect when getting a home appraisal. Providing these insights to customers will help establish the loan officer as a seasoned pro. So here are eight steps to take when explaining the appraisal process to borrowers:...

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Score Some Appraisal Home Runs this Summer

Score Some Appraisal Home Runs this Summer

Managing appraisal appointments can be the most frustrating part of ordering appraisals. There are so many parties to manage that it’s no wonder things often go awry. Our industry has been struggling with this issue for years, and it’s only getting worse. In addition to the pure mechanics of coordinating the multiple parties involved in scheduling an appraisal, a growing number of markets are experiencing a shortage of appraisers. So, what can be done about it?...

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