The non-qualified mortgage loan market has originators a bit wary toward borrowers and questioning if the risk is really worth it.
Lenders are showing mixed feelings toward the non-qualified mortgage loan market, according to the Lenders One Mortgage Barometer, a new survey of 200 mortgage lenders conducted by Lenders One.
The survey results found that although 64 percent of lenders stated that they originate non-qualifying mortgage loans, only 18 percent indicated that they do this often. Of the lenders that do no originate non-qualifying mortgage loans, 51 percent indicated that they are extremely or very likely to originate these types of loans in 2016.
Lenders One also found that mortgage lenders are focused on gaining competitive edge through better customer service and faster origination and closing processes. Seventy-seven percent of mortgage lenders say better customer service will be the key to being competitive in 2016. Meanwhile, 71 percent of those surveyed indicated that improving the time from origination to closing will make them competitive.
“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 CEO of 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.”
Despite the upbeat consensus among lenders, they are still troubled by regulatory compliance and interest rates.
A total of 73 percent of respondents said compliance with regulations and rising interest rates are extremely impactful to their business, while 68 percent said it was very impactful.
Lenders One pointed out 3 compliance-related areas on which mortgage lenders are most focused:
• TILA-RESPA Integrated Disclosure (TRID) (41 percent)
• The Home Mortgage Disclosure Act (HMDA) (24 percent)
• Consumer Financial Protection Bureau (CFPB) audits (14 percent)