Origination

In today’s environment, all retail lenders should be asking themselves, “What value am I truly offering a borrower?” We know that more and more consumers use an online, self-service option when making any retail purchase —mortgages included. When such convenience is available, why would a customer pay more to get a home loan from a retail lender instead? When faced with these questions, it is important to evolve your retail business model to stay ahead of the curve. Editor's note: This select print feature appeared in the June 2015 edition of MReport magazine, available now.

As first-time buyers return to the housing market, the total number of existing-home sales saw the largest increase in May than it has in nearly six years, according to a report by the National Association of Realtors (NAR). May home sales experienced a growth spurt following April's decline and are now at their highest pace since November 2009.

Home sales in May were greater than in any other May since 2008, while home prices continued to rise, according to the RE/MAX National Housing Report. Sales are on a four-month trend in which they were higher than both the previous month and the same month in the previous year.

More borrowers are looking to revise and replace their old loans and receive new ones with better conditions, according to the Federal Housing Finance Agency's (FHFA) monthly April 2015 Refinance Report. Refinance volume increased for April 2015, while mortgage rates remained near 20 month lows in March.

After only three short years of business, Discover Financial Services announced today in a press release that its mortgage origination business, Discover Home Loans Inc. will close. The origination business was acquired in 2012 to focus on profitable direct banking products that the company believed would produce greater growth opportunities.

The time to purchase a home is now, as lenders are loosening mortgage guidelines and the average down payment decreases. According to a report released today by LendingTree, an online loan marketplace, down payment percentages for conventional 30-year fixed rate purchase mortgages dropped from 17.59 percent in the fourth quarter of 2014 to an average of 16.98 percent for the first quarter of 2015.

Builders are exuding more confidence in the real estate market as more buyers purchase homes with unwavering certainty. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built, single-family homes in June reached a high of 59.

Yesterday, as mortgage rates crept up to 4 percent this week for the first time since November 2014, consumers responded with a decrease of mortgage applications by 9 percent, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for May 2015.

In response to the positive Bureau of Labor Statistics (BLS) employment data released on Monday, the 30-year fixed-rate mortgage rose above four percent this week for the first time since November 2014. Freddie Mac’s Primary Mortgage Market Survey (PMMS), revealed that the average fixed mortgage rates averaged 4.02 percent for the week ending June 11, 2015.

For the 27th consecutive month, cash sales made have fallen to 34.6 percent of total home sales nationally in March 2015, down from 39 percent in March 2014, according to CoreLogic data released today.