Mortgage creditors score high from borrowers – Orange County Register
Lining up indeed when it comes to borrower satisfaction with their mortgage originators amid the COVID-19 pandemic.
Mortgage rates have collapsed. An overwhelming number of borrowers have flocked to the mortgage queue to catch the wave of low mortgage rates. A record mortgage loan of $ 4.3 trillion was taken out in 2020, according to Black Knight. Of these, $ 2.8 trillion was refinancing and $ 1.5 trillion was purchase loans.
Consumers were very happy with their mortgage originators despite the mess of longer timelines and stricter underwriting requirements related to COVID, according to a national survey.
The Stratmor Group analyzed last year’s figures on more than 256,000 respondents to the Occupied, Funded and Funded Residential Mortgage Survey in its annual Mortgage Findings. We are talking about banks, credit unions, non-bank lenders and mortgage brokers.
Loan officers scored 95% consumer satisfaction.
Not bad for a chaotic ever-changing existence of lockdowns, working from home, fear, panic, and worry that death may be knocking on your door.
Mortgage originators have averaged 95 out of 100 in three of the past four years.
“To put it another way, the fish were not just jumping into the boat, they were threatening to sink it,” wrote survey director Mike Seminari.
Even at 95% satisfaction, the Stratmor SAT survey had key takeaways for stakeholders. The first one reminds me of the lyrics to “The Things We Do for Love”, which say: “Communication is the problem of the response”.
“Communications should be at a consistent time each week and in the style desired by the borrower, phone, email, SMS,” Seminari said. “Wholesale (mortgage broker channels) has always performed better than retail in the white glove service. “
I’ve asked some industry peers about the flaws they see in the system and how we can make it better. For one person, everything is said to highlight the additional income requirements related to COVID-19.
For example, show proof of business activity – like an invoice in the last 20 days or an income statement in the last 60 days before financing a freelance borrower.
Getting turned down in 2020 could pivot to loan approval in 2021 for you.
Over the past year, I have received a plethora of complaints from readers about being cold in the eyes of lenders. Many said they were simply told “no” because of the complexity of their file, the small amount of the loan or the fact that they were self-employed.
The volume of new mortgage applications appears to be plummeting this week as a direct result of rising mortgage rates. Lenders are now focusing on much thinner profit margins to keep rates significantly higher, stay competitive, and feed the beast.
In addition, efforts are being made to debug, fix download issues, and get used to a brand new loan application model mandated for March 1. The new loan application is nine pages long with a separate four page addendum for each additional borrower.
The old five-page “1003” application was last updated in June 2009.
If your qualifying situation is complicated, now may be the time for you.
The rates are higher, but they are still historically excellent. Lenders have an abundance of staff with time to dig.
“Difficult loans can work very well,” said one industry executive. “The key is good communication.
Borrowers and their loan officers should clearly and succinctly present the facts and issues the underwriter needs to consider.
When it comes to small amounts of credit, many stores avoid low balance mortgages because they generate little or no profit. Can you say loss leader?
Another problem: Federal regulations known as HOEPA (Homeowners’ Equity Protection Act) and the QM (Qualified Mortgage) rule limit loan origination fees, according to Garris Horn attorney Roger Fendelman.
“The points and loan origination fees are capped at somewhere under $ 2,500 for a $ 50,000 loan, $ 3,308 for $ 100,000 and $ 4,500 for a $ 150,000 loan,” said Fendelman. “It is extremely important that lenders who discriminate against consumers who apply for smaller loans understand the risks of doing so and strive to ensure that they are providing credit to everyone who qualifies. “
The app will likely be beefed up under the Biden administration, he said,
A lender also gives a break to independent borrowers. After raising its lowest average FICO score for all borrowers to 780 last year, it lowered that requirement to 700 last week.
Freddie Mac Rate News: The 30-year fixed rate averaged 3.05%, up 3 basis points from last week. The 15-year fixed rate averaged 2.38%, 4 basis points higher than last week.
The Mortgage Bankers Association reported a 1.3% drop in mortgage application volume from the previous week.
At the end of the line : Assuming a borrower gets the 30-year average fixed rate on a compliant loan of $ 548,250, last year’s payment was $ 93 more than this week’s payment of $ 2,326.
What I see: Locally, well-qualified borrowers can get the following fixed rate mortgages with a cost of 1 point: a 30-year FHA at 2.25%, a 15-year conventional at 2%, a 30-year conventional at 2, 75%, a conventional 15-year high-balance ($ 548,251 to $ 822,375) at 2.25%, a conventional 30-year high-balance at 3% and a 30-year jumbo set at 3.125%.
Eye-catcher loan of the week: A 30-year fixed rate of 2.875% without points.
Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or [email protected] Its website is www.mortgagegrader.com.