Survey: TILA-RESPA impact riles most mortgage bankers

Lenders One survey finds compliance with new rules a major concern

The majority of mortgage bankers are focused on the looming TILA-RESPA rule changes and worry about its impact on their business operations, according to a new survey from Lenders One, the national alliance of community mortgage bankers, correspondent lenders and suppliers of mortgage products and services managed by a subsidiary of Altisource Portfolio Solutions (ASPS).

According to the Lenders One survey, more than 68% of mortgage banker respondents said the top challenge they face in preparing for the new TILA-RESPA Integrated Disclosure rule is the rule’s impact on the processes and workflows that will be required to meet a three business day window for delivering a loan estimate.

Additionally, 44% of the respondents said that the technology necessary to manage quality control and ensure compliance is the area of the loan origination process that is the needs the most improvement.

"Although very important, investing in technology alone won't solve all of the challenges facing mortgage bankers as they work to expand their businesses against the backdrop of new regulatory requirements coming in August," said Jeff McGuiness, chief executive officer of Lenders One. "Respondents also recognize that process improvement is core to propelling growth and achieving compliance with the new regulations."

The survey also focused on mortgage bankers’ view on how to improve the loan process. According to Lenders One, 48% of the survey respondents said they believe that more online and/or mobile access to track documentation for borrowers is the most important element to help streamline the loan lifecycle process for customers this year.

Nearly 32% of the respondents said that improved electronic communication with borrowers in the most important potential change to the loan process, while 20% said that providing easier pre-approval to borrowers before they begin house hunting is key.

The survey also touched on what may be keeping more home owners from refinancing their mortgages, despite a recent uptick in activity. Nearly 40% of the survey respondents said that the initial costs of refinancing is keeping more borrowers from refinancing, while 31% said that the borrowers are suffering from a lack of confidence in their short-term and long-term financial situation.

The remaining 29% of respondents said that borrowers may be reluctant to refinance because they’ve had unsuccessful attempts to refinance in the past.

The respondents also spoke about Millennials and how to attract the next generation of homebuyers to the market. According to the survey, 40% of the respondents said that they believe offering a new, more streamline approach to originating loans will help to attract Millennials.

One-third of the respondents said that offering lower down payments will bring Millennials to the market, and 27% said that increasing efficiently in loan processing which would lead to less paperwork is key to attract Millennials.

According to Lenders One, the survey was conducted at the Lenders One members conference in March 2015, and consisted of 100 mortgage banker members, preferred vendors and national program participants.

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