About 73% of mortgage lenders believe the new administration’s policies will have a positive impact on the lending environment, according to the Lenders One Mortgage Barometer, a monthly survey of 200 mortgage lending professionals.
“Despite some industry concerns over rising interest rates, lenders are optimistic about the potential for a more flexible regulatory environment in 2017 and beyond,” says Bryan Binder, CEO of Lenders One, in a release.
Lenders are also ready to make investments in their organizations’ business operations. In fact, 42% of lenders indicate their biggest investment is in operational changes (hiring new staff, compliance support and software support), and 25% say they are currently making the greatest investment in marketing, according to the survey.
Although these investments are necessary for the industry to keep pace with consumer demand, they may also be driving up the cost per loan: About 65% of respondents say they expect the average cost to originate a loan will continue to increase.
The survey reveals that lenders are ready for new regulatory requirements. About two-thirds (65%) say they are ready for new reporting requirements under the Home Mortgage Disclosure Act (HMDA).
However, lenders report that they are being challenged to find the additional resources needed to report the additional transactional data, such as home equity lines of credit (HELOCs) and dwelling-secured loans for apartments. While lenders are investing in staff and technology, about one-third (32%) cite challenges with securing additional resources to report, connect and analyze transactional data.
The survey also reveals that an increasing number of lenders are now using e-closings (whether fully electronic or hybrid). About 61% say their organization has implemented e-closings. Interestingly, “seasoned” lenders – those in the business for 10 or more years – are more likely to be using e-closings: The report shows that about 67% of seasoned lenders are using e-closings.
Although 39% of lenders report they are not using e-closings, about a third of those respondents say they expect their organizations to implement e-closings in one to two years, on average.