Mortgage Predictions 2006

The competition our athletes will face during the Olympics this coming February will be nothing compared to the competition that will hit mortgage lenders within the next 12 months. Streamlined first-mortgage settlements, increased industry regulation and the evolution of e-lending will be three trends that will be part of the winds of change shaping our industry in 2006.

Up until now, the first mortgage settlement industry hasn’t experienced the efficiencies of a centralized purchasing environment like home equity lending has. That is primarily because consumers still pay for everything at the table and no one has been negotiating on their behalf. But that will change in 2006 because lenders will significantly begin to use bundled, streamlined services on first mortgages as a way to differentiate themselves in the marketplace. These changes will be driven by the acknowledgment that true bundled services can deliver tangible consumer value in the first-mortgage market, thus increasing the challenges to the status quo on exorbitant title premiums and the traditional way first mortgages are closed.

Look for the FDIC to become more diligent in its oversight of home equity lending and flexible payment first-mortgage practices. Most recently the OCC (Offices of Comptroller of the Currency) has taken a more restrictive approach; guidelines handed down expressed concern that some lenders weren’t being as diligent as they should in monitoring the origination risk and performance of their loan portfolios. We expect to see an increased use of automated property valuation to help mitigate the overall risks with home equity loans, plus a greater use of value insurance products to help lenders offset the risks associated with alternative products.

Expect lenders to increase the scrutiny of their portfolios with an eye to the concerns of Wall Street. The secondary market will be looking for lenders to do more thorough due diligence on their portfolio of loans with respect to the values and underwriting practices. Due to the perceived real estate bubble, the secondary market will demand increased “auditing” of values.

E-lending is still E-volving with each and every year. E-lending will have its day and smart lenders are laying the groundwork for it now by providing their customers with electronic digital signatures as a precursor. This will allow lenders to own that trusted relationship with their customer, witch will drive these transactions with the next generation of homebuyers.

Expect 2006 to be a year that combines technology and people with an ability to anticipate customer needs. Lenders cannot afford to watch the competition from the side lines or take a breather. The environment will be fast, changeable and will require the ability to sense the shifting needs of the market place. In 2006 watch for the evolution of Safe Harbor Capital to rise to the occasion, meet these contemporary needs and become an industry leader.
For more information on Mortgages please contact Michele Francis President of Safe Harbor Capital Group at 1-877-742-4552, or visit www.safeharborcapitalgroup.com.

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About the Author:
Michele Raab-Francis is the author of this article and President/CEO of Safe Harbor Capital Group. She has helped thousands of individuals with their Mortgage needs. Visit her website today to find out how you can get a free consultation http://www.safeharborcapitalgroup.com.