NMP - April 2017 - 26
Raise your hand if you've heard this
By Jon Tallinger
ut seriously ... where do Millennials fit into the
current mortgage landscape? Do they really
prefer to rent as opposed to buying? Do they
want to purchase a home, but just have too
many obstacles in their way?
Let's start with a few characteristics that remain constant
for the Millennial generation in regards to their slow-to-leap
path to homeownership:
APRIL 2017 n National Mortgage Professional Magazine n
They're encumbered with debt.
They're getting married and having children later.
They have less money to spend.
These things are out of the mortgage industry's control.
What is in our control is how well we prepare for one of the
largest generations in history to enter prime purchasing years.
Which is right about now.
Trying to predict when Millennials will ultimately take that
leap and purchase their first home is an exercise in futility.
But when they do decide to buy, and in turn apply for a
mortgage, you can bet they are going to migrate towards
The top lenders and vendors in the mortgage industry are
investing heavily in technology, and for good reason. This
generation of digital natives are accustomed to having realtime updates at the click of a button or the touch of an app
icon. For all the progress that the mortgage industry has
made, much of the technology in place is antiquated.
The mortgage originators that will succeed in the coming
years will be the ones who adapt to the changing landscape.
Forward-thinking lenders are building resources for their
brokers and originators to allow them to help close loans
faster and more efficiently. These top lenders are also aligning
themselves with title companies, appraisal management
companies, and mortgage insurance providers that are
utilizing dashboards, apps and metric-driven solutions to help
simplify the loan process.
The moral of the story? Choose your mortgage lenders and
vendors wisely. Remember, this generation of future
homebuyers is living in the digital space ... now using it as
means to order food, communicate, bank, shop and even
date. Why should we expect that they expect the homebuying
process to be any different?
Grace Hopper, a legendary computer scientist once said,
"Humans are allergic to change. They love to say, 'We've
always done it this way.'"
The mortgage industry is changing. Stay ahead of the curve
and don't be afraid to embrace technology ... your next batch
of clients already have.
Jon Tallinger is vice president of Sales and
Marketing at Class Appraisal, a Michigan-based
nationwide appraisal management company
(AMC). Jon has been a state licensed appraiser in
Michigan since 2002. He may be reached by
phone at (866) 333-8311 or e-mail
nmp news flash
continued from page 22
popularity of adjustable rate
mortgages is something to keep
an eye on as the spring home
buying season warms up. As the
spring home buying season gets
underway in earnest, the volume
of higher risk purchase
applications will grow and further
increase loan application defect
and fraud risk. The increased
share of higher risk purchase
transactions and the potential for
more adjustable rate mortgages
amid the expected strong spring
market means mortgage lenders
should remain watchful for defect
and fraud risk."
Amending Regulation B
The Consumer Financial
Protection Bureau (CFPB) has
released a proposal to amend
Regulation B, stating that it seeks
to "provide additional flexibility
for mortgage lenders concerning
the collection of consumer
Regulation B implements the
Equal Credit Opportunity Act
(ECOA), a federal civil rights law.
Under the CFPB's proposal,
existing restrictions on collecting
demographic information on
mortgage applications would be
relaxed to help the CFPB and
other regulatory agencies ensure
they are following the law.
"For the mortgage lending
industry, the proposal would
provide flexibility for individual
lenders while supporting the
industry's ability to use
consistent forms and practices,"
said James Wylie, counsel in the
CFPB's Office of Regulations.
"We believe this will help the
mortgage industry as it works to
adopt new application forms,
including the revised Uniform
Residential Loan Application."
Mortgages During 2016
Last year saw $490.6 billion in
commercial and multifamily
mortgages, according to new
data from the Mortgage Bankers
Multifamily properties recorded
the highest origination volume at
$214.1 billion, followed by office
buildings, retail properties,
hotel/motel, industrial and health
care properties. First liens
accounted for 97 percent of the
total dollar volume closed.
Commercial banks were the
leading investor group for whom
loans were originated, with
$157.4 billion of the total, while
enterprises saw the second
highest volume at $105.8 billion.
"For originations, 2016 was the
third highest year on record, after
2007 and 2015," said Jamie
Woodwell, MBA's vice president
for commercial real estate
research. "Borrowing and lending
backed by multifamily properties
made up the largest share of the
market, and Fannie Mae and
Freddie Mac drove much of that
Zillow: Renters Will
Need to Earn More to
Cover Housing Costs
Renters will need to raise their
incomes by an average of $168 a
year to keep up with expected
rent increases over the next 12
months, according to a new
forecast from Zillow, which
added that median rent prices
are predicted to be $1,420 at this
time next year.
In several major metros, the
share of income needed to cover
the monthly rent exceeds the
concept of not spending more
than 30 percent of income on
housing. In some of the priciest
Seattle, Los Angeles, and
Boston-renters will need annual
income increases of more than
$1,000 to avoid allocating more
of their paychecks to cover
housing costs. However, Zillow
noted that rent appreciation has
slowed and rents are predicted to
inch up by only one percent over
the next year.
"For a long time now, renters
have faced an affordability crisis
when it comes to housing, and
renters in some hot markets will
still need significant raises just to
keep up with rising rents," said
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