Housing survived 2014, and now heading into next year, experts are once again weighing in on what they see for the future of the housing industry and overall economy.
Ghazale Johnston, a managing director with Accenture Credit Services, outlined in an interview with HouingWire 3 topics she believes will take precedence in 2015.
Here are her predictions for mortgage lending in 2015.
1. Regulations
Some lenders may be under the impression that the regulatory scene will quiet down somewhat in 2015. But that doesn’t look likely. Lenders will need to be prepared for the CFPB’s proposed HMDA rules which will place an even greater emphasis on monitoring of predatory lending and consumers’ access to credit. The new rules could expand the information lenders collect from borrowers and may even extend the law’s reach to additional consumer finance products such as home equity loans. Regulators may also seek historical information about closed and denied loans. Lenders with robust data content management systems that effectively track and aggregate all this data – so that it can be reported to regulators – will be well positioned to meet the requirements without major disruption to their current business.
While most lenders are aware that the new RESPA/TILA rules will take effect next August, they may also need to start preparing for potential new modifications regarding timing requirements and disclosure language. These and other regulations may require lenders to make upgrades to their systems, update their processes and retrain staff.
2.Flat mortgage market
With origination volume unlikely to spike markedly in 2015, according to projections, lenders will need a sales capture strategy that focuses on taking market share away from competitors. In short, lenders will be fighting for fewer customers. Never before has differentiated customer experience been so critical to lenders’ ability to compete. Accenture research shows that 55 percent of consumers who encounter a frustrating experience while shopping for financial services began considering different providers almost immediately. To address this challenge and be well positioned to win new business, lenders must have digital capabilities that support customer preferences – from prospecting through servicing.
Look for bold lenders to reorient their mortgage business to become “Everyday Banks” – using mobile, online and social media to play a deeper role in the everyday lives of their customers. These lenders will increasingly integrate their offerings with local realtors, online home marketplaces such as Zillow, builders, home goods retailers and home security firms. In so doing, lenders become integral to the home buying experience, rather than just a provider of another financial product or transaction. The goal is to turn mortgage financing from what has traditionally been a one-time event into a long-term borrower relationship.
3. Data analytics
To broaden their customer base next year, some lenders may ramp up non-qualified mortgage lending and go back to originating mortgages with as low as three percent down payments per the FHFA’s new guidelines. To take advantage of these opportunities however, lenders will need to strengthen their data and analytics solutions to ensure that the expansion of new originations does not introduce unnecessary credit and repurchase risks.
Additionally, the right analytics tools can give lenders a more complete view of borrowers and their home buying needs. That can help lenders anticipate existing customers’ needs for a new loan in advance of an application, enabling them to extend offers to these customers and connect them with other key parties in the home buying process.
