The MBA Annual 2014 was exciting and an enriching event as always. It is an event that everyone from the industry looks forward to. To summarise the overall experience and map it to my knowledge, I would say that I found the general atmosphere to be upbeat. There were positive vibes among participants as well as speakers about the economy, the housing market and the overall mortgage industry. Their feelings echoed mine as I observed the trend being positive with unemployment reducing to a healthy level.
It is now a purchasers’ market! People will have larger incomes that will encourage them to move to larger houses. This translates to surge in business for the consumer lending industry. I also believe that new constructions will rise to meet the growing demand. This is a period of progress and momentum. The economic growth will lead to increase in demand for housing, which will require lenders to step-up & extend credit to a wide-range of responsible borrowers. In 2015, key trends that will impact mortgage companies will be the level of customer satisfaction, compliance related legal issues, mobile accessibility and warranty management.
With regards to the current state of Government Housing Finance, I think that the time is right for reforms to be initiated. For example, if consumers are weighed down by student loans, then this will indirectly affect the market for housing mortgage loans. Some good work has already begun. One of FHFA’s key initiatives is revising and clarifying the Representation and Warranty Framework under which lenders and enterprises operate. These representations and warranties provide the necessary assurances that allow Fannie Mae and Freddie Mac to purchase loans in an efficient and responsible manner without checking each loan individually or being at each closing. They also provide the enterprises with remedies to address situations where lenders obligations to meet the enterprises’ purchase guidelines have not been met completely.
To summarize, I believe that the mortgage industry will experience continued growth in the coming years. However, this time around, technology will drive the business. Apart from being solution providers, business & technology partners will need to be domain experts who understand the nuances of this complex industry and offer advanced solutions which are end-customer friendly.
