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Archive for mortgage trends

Where is Our Mortgage Industry Today?

In late October, the National Mortgage Bankers Association had their annual conference.  They talked about some statistics about our industry and where things are today in comparison to the last 12 years.

What is the average number of loans that an Underwriter underwrites per month?

In 2002, the average Underwriter underwrote 174 loans per month.  With all the changes in guidelines, regulations, etc. that our industry has gone through over the last 12 years, the average underwriter now does 35 loans per month.

In the past 2 years, the average cost per loan has increased 75-80 bps.  What does that mean?

In 2012, the average cost for a mortgage company to originate, process, underwrite and close a loan was $5,200.  Just 2 years later with all the added compliance and regulations, the costs have increased to over $7,000 per loan.

One of the most interesting facts is involving student loan debt.

In 2004, the total student loan debt in the US was $200 million dollars.  Just 10 years later, the total student loan debt is over $1 trillion dollars.  On a positive note, it is great to see people are continuing their education. However, it is contributing to our graduates coming out of school with debt that can hinder them from purchasing a home.

Consequently, apartment rents are at an all-time high and more are popping up every day.

Large bank loan officer turnover is at 65% due to frustrations on the mortgage lending side.

The number of total Independent Mortgage Companies has risen from 25% in 2008 to 40% in 2013.  This is largely in part from the banks having many different business lines (such as credit cards, car loans, deposit accounts, etc.) and most independent companies’ just focusing on mortgages.

Some exciting projections for 2015 are…

•      The MBS is projecting a 7% increase in total mortgage origination from 2014.  While they anticipate purchase originations will increase 15%, they expect refinance originations to decrease 3%.

•      We are also seeing an “Opening of the Credit Box” in 2015.  What this means is that we hope to see guidelines become less strict.

•      One potential new product for 2015 is Fannie Mae bringing back a 97% LTV product to compete with FHA.  This would have lower mortgage insurance than FHA and be a great alternative to buyers with limited cash.

•      No one knows where rates may fall but the projections are…

–    5% by end of 2015

–    5.5% in 2016

–    6% in 2017

Source: Atlantic Bay Mortgage