NMP - December 2016 - 64


a report of findings

DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

64

credit to low- and moderate-income
borrowers were on the supply side
or on the demand side. As fate
would have it, a dead heat, with 13
indicating a supply-side (inventory)
limitation and another 13 indicating
a demand side (credit) deficiency.
Are the GSEs requiring your firm
to use trended credit data, asked
Question 27. Fourteen executives
reported either Fannie Mae or
Freddie Mac was mandating use of
trended data compared to 12 others
who were not (yet) so required. As
for benefits from the use of trended
credit data, not much reported 10
executives, twice the number of
affirmatives, with another 14
respondents saying it was too early
to determine benefit.
All or mostly electronic, asked
Question 29 about the mortgage
processes at their firms. Mostly, said
20 executives, while another six
reported all their processes were
done electronically and without
paper.
Question 30 wondered if the
executives thought borrower
counseling was proving valuable to
first-time homebuyers (as mandated
by some affordable products).
Scaled one through 10, the group
average was 5.4 amidst a range of
two through 10.
How about industry profits in
2016, do you expect them to be
higher than last year, asked
Question 31. Higher, said 25
compared to four executives who
thought otherwise.
Question 32 wanted to know if
those surveyed were seeing or
hearing about a measurable pickup
in home equity lending. We are
experiencing a pickup, reported 15,
but another 12 saw no evidence of
accelerating home equity lending.
Questions 33 to 36 sought letter
grades A to F for four agencies
based on the executive's evaluation
of their overall performance over the
past year. Fannie received a B,
Freddie a B+, HUD/FHA a C+, and
the CFPB a D+.
Do you deal with one or more of
the mortgage cooperatives, inquired
Question 37? We do, said 16 of 28
executives responding.
Questions 38 to 41 focused on
compliance/regulatory costs in the
post-Dodd Frank mortgage market.
For the group of 29 firms, the
average multiple for which
compliance costs have increased
was 4.1 times, within a range of a
two to 15 multiple; the average
percentage of their firm's total
operating expense driven by
compliance was 24.8 percent in a
seven to 50 percent range; the
average cost added to a single

continued from page 33

mortgage loan due to regulations was
estimated at $1,788 per loan inside a
range of $250-$4,500; and 16 of 28
indicated that they expect loan
production expenses will stabilize in
2017, but 12 other executives think
expenses will rise modestly higher
next year.
Questions 42 to 44 dealt with
offshoring, CFPB audits and servicing
compensation, respectively. Only six
of 29 firms offshore at least some
mortgage services, 12 of 29 have
been through a CFPB audit, and 12
executives think traditional servicing
compensation levels should change
versus 14 who prefer it remains at
current levels (25 and 44 basis
points).
TRID was the topic of Questions
45 to 47. We wanted to know if the
executives' firms were completely,
100 percent through the transition to
TRID rules, if they found the requisite
disclosures a significant improvement
for consumers, and if the proposed
changes added greater clarity to the
rule. Seventeen of 29 respondents
indicated they were completely TRID
compliant and not experiencing any
hiccups, 21 of 29 reported no
improvement in the disclosures given
consumers, and 18 said no greater
clarity resulted from the CFPB's
proposed TRID changes released last
August.
Questions 48 to 51 all involved
the CFPB. Question 48 focused on
the recent changes to the consumer
complaint database; Question 49
wondered if lenders viewed TRID as
another long-term liability for the
industry; Question 50 wondered if
mortgage executives felt Realtors
operate with little liability concerning
CFPB rules and regulations; and
Question 51 asked if all the new rules
made the mortgage finance process
safer for consumers. Among those
surveyed, 18 thought the proposed
changes added little clarity to the
rule; 19 weren't particularly pleased
with the consumer complaint
database changes; 23 of 28 thought
the TRID rules created a (legal) liability
for mortgage banking. And yes,
Realtors are viewed as largely
operating with impunity, said 25 of 28
executives answering that question.
As for consumer protection, a mixed
bag of responses: 14 thought the
process was made safer for
consumers, while 15 others saw no
safer process (but a far more
expensive one).
Is California's housing boom
coming to an end, Question 52
wanted to know? Again, a standoff
response, with 14 executives saying
it's ending and 13 others not so
inclined. Questions 53 to 54 focused
on Wells Fargo's cross-sell scandal.


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