Although the rate hike is expected to occur at some point before the end of 2015, mortgage bankers indicate that the real estate market in 2016 will favor sellers.
Lenders One, a subsidiary of Altisource Portfolio Solutions S.A., reported Tuesday, 60 percent of the bank’s members noted that 2016 is expected to be a sellers’ market. In addition, 89 percent of member are confident that the market could survive a possible interest rate increase this fall.
Mortgage bankers are also watchful of other factors that could affect the industry’s growth such as: innovation in banks’ menu of mortgage products (26 percent), continued increases in home values (22 percent), and lowering acceptable down payment amounts (10 percent).
“Mortgage bankers are generally optimistic about 2016 and believe that a possible interest rate hike is not going to create a major hurdle for continued industry growth next year,” said Daniel Goldman, interim CEO of Lenders One. “Respondents also expressed positive views about TILA-RESPA preparedness, another big mortgage industry concern, in part because the extension of the implementation deadline has afforded mortgage bankers more time to get technology and processes ready to be compliant.”
Lenders One also found that mortgage bankers’ sentiment showed that they are prepared for TILA-RESPA Integrated Disclosure (TRID) rule, which will go into effect on October 3, 2015. However, the bankers are mixed on impact of the rule’s delays.
“Mortgage bankers are generally optimistic about 2016 and believe that a possible interest rate hike is not going to create a major hurdle for continued industry growth next year."
Just a couple of months before the TRID rule goes into effect, 64 percent of mortgage bankers said they feel knowledgeable of the rule and have the right tools to adjust to the changes. Only 27 percent indicated that they were somewhat ready, while only 9 percent stated that they do not have the tools or knowledge to adapt to the new rules.
Nearly half of the survey respondents said that adjusting to the new TRID rules would be difficult when questioned if the implementation delay will make adjusting to the new TILA-RESPA rules more or less difficult for lenders. However, 47 percent felt adjusting to the new rules will be the same, with or without the delay.
“Preparation for the TILA-RESPA integrated disclosure rule requirements has dominated industry conversations for several months, and we’ve been working closely with our members to provide services and offerings that can help them address these changes,” Goldman said. “Fortunately, the survey results show that at this point the industry feels relatively well-prepared for the implementation of these new regulations.”
Justin Lee Thayer is Lane counties expert in market analysis for real estate investors. Call Justin @ 541-543-7287