We write a lot about mortgage automation, and for good reason. Automating the process, from application to underwriting to closing, is the best way to ensure a great borrower experience and keep costs to originate at a reasonable level.
Except…
If that automation removes worthy homebuyers from the process for the sake of efficiency or cost savings, the mortgage industry has won the battle but lost the war for its future.
Frank Fuentes, national vice president of multicultural community lending at New American Funding, makes a strong case for a hybrid approach when it comes to qualifying minority homebuyers.
"Several factors sometimes don't get taken into consideration when underwriting minority borrowers, such as rental housing history, part-time jobs with less than two years' history, and credit tradelines that may not be reporting on credit reports, such as payments to storage rental units, cell phones and utilities. As a result of many lenders relying heavily on technology for underwriting purposes, many minority homebuyers get left behind and discouraged."
Discouraging minority homebuyers has a ripple effect, not just on their families and communities, but the mortgage business and the larger economy. As Fuentes points out, "According to the Urban Institute, all future homeownership growth will come from non-white households, with Hispanics accounting for 70% of homeownership growth over the next 20 years."
If all future homeownership growth will come from non-white households and your mortgage process doesn't consider how best to serve them, your cost to originate will become the least of your concerns. You ignore the needs of potential homebuyers at your peril.
In today's episode of HousingWire Daily, HousingWire Digital Media Manager Alcynna Lloyd is joined by Black Knight economist and Director of Market Research Andy Walden. During the interview, the pair discuss Black Knight's most recent forbearance report, which indicates plans in forbearance have fallen under 2 million for the first time since April 2020.
A shareholder sued Rocket Mortgage, the Detroit-based mortgage behemoth, for allegedly making misleading disclosures to conceal adverse market conditions.
Looking for a LOS that can help streamline your mortgage process? Path, the cloud-based, fully configurable LOS from Calyx is designed to simplify the loan process and provide the flexibility lenders need to run their business their way. Learn more.
The number of buyers who locked in mortgage rates to purchase a vacation or second home nationwide fell 11.1% year over year in June, per a Redfin study.
Lenders today need a way to validate the closing agents, ensure the legitimacy of the wire transfer information and confidently fund loans with exacting precision. Here's how to do just that. Presented by DataVerify
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