[Expert commentary] Much of the commentary surrounding the Federal Reserve’s decision Wednesday to raise the Fed Funds rate by 25 basis points has been about how this is likely to have a negative effect on home affordability. What if this isn’t true? In fact, here are three positive side effects to rising interest rates.
Some industry observers have been predicting the demise of this market since Blackstone, the largest purchaser of single-family rental homes, announced plans to slow down its acquisition volume earlier this year. But the data paints a very different picture.
The double whammy over the past few days of flat existing home sales and a disastrous drop in new home sales appears to have dimmed many analysts’ views of the housing market recovery. So is the housing recovery over?
The slowdown is partly due to the fact that there are fewer distressed assets available for purchase as foreclosure rates slow down. But it’s also partly due to the fact that there’s just not much inventory of any kind on the market.
What can we make of the seeming incongruity of indicators in the housing market as 2013 comes to a close? Mortgage applications recently hit a 13-year low. Existing home sales fell for the third consecutive month – and for the first time on a year-over-year basis in quite some time.
"If the CFPB intends to pursue discrimination caused by policies that have a discriminatory effect, it may want to start by looking a little more closely at the policies of its own," says Rick Sharga, executive vice president with Auction.com
A foreclosure moratorium is one of those suggestions that sounds like a good idea. And, for borrowers currently in foreclosure or seriously in default on their loans, a moratorium would provide a temporary reprieve.
Unfortunately, for the overwhelming majority of those borrowers, a moratorium would do nothing to change the ultimate outcome of the foreclosure process, it would simply be delaying the inevitable.
The mortgage industry is leveraging technology like never before, streamlining processes across the spectrum of lending, servicing, investing and real estate. The combination of regulatory pressure and consumer expectations have set a high standard for efficiency and transparency, requiring a significant investment of time, money and talent to hit the right notes for both.
Ironically, the monkey on the mortgage industry’s back for the past 10 years — increasing regulation — is the very thing that forced companies to find efficiencies in every part of the process, which serves them well as they look to engage tech-savvy consumers. Even as the enforcement of some of those regulations is now in question, the long-lasting benefits of investing in automation will stand.
Mortgage banks have traditionally been slow to embrace new technologies, and while the technology that has improved efficiency, security and customer experience in a multitude of other industries (transportation, education and retail, to name a few) is finding its way into the loan production process, a lot of opportunity still exists in other stages of the mortgage life cycle.