Each fall, trendsetters at Pantone decide on the next year’s “color of the year,” which they feel will define and influence the upcoming year. Whether the “color of the year” is a self-fulfilling prophecy or the trendsetters really are that on trend is currently unknown. Similarly, the mortgage industry has no shortage of trend predictions being made each month, quarter and year.
Unfortunately for lenders, these are never anything more than predictions as only time will tell how the markets will play out.
However, the mortgage industry is facing a shift in trend predictions this year, as experts unofficially name a “color of the year” in mortgage. Current buzzwords in the mortgage industry include affordable, underserved, accessible and equity. With the increasing regulatory focus on expanding affordable lending programs, mortgage lenders need to have a plan to serve the underserved.
Many lenders have historically shied away from offering a robust affordable lending product line, including down payment assistance (DPA) programs and ITIN mortgages. Surprisingly, risk isn’t the main factor affecting lenders’ appetite for DPA and affordable lending products today. What’s really holding lenders back are the challenges associated with DPA and affordable lending products.
Owning a house with the white picket fence may be a key part of the American dream, but lenders still need to make money in order to stay in business. At the end of the day, there must be a better balance between doing good for their communities and themselves at the same time.
Finding the ‘why’
The benefits of a lively and contemporary DPA and affordable lending program are far-reaching and untold, brightening the lives of many. However, those terms don’t always reflect well on a profit and loss statement, and many lenders need to define the benefits of offering these programs in terms other than pure numbers. While not the most altruistic motivation, meeting regulatory expectations is one advantage to offering DPA and affordable lending programs, as this would help align lenders with current federal-level directives to address the racial homeownership gap.
How Mortgage as a Service Levels the Playing Field for Minority and First-Time Homeowners
This white paper explores the benefits of closing the homeownership gap, systemic mortgage industry issues, and how Salesforce is partnering with Rocket Mortgage to enable mortgage as a service and increase minority and first-time homeownership.
Presented by: Salesforce
Through DPA and affordable lending programs, lenders have an expanded ability to fulfill their desire to help low-to-moderate income borrowers obtain the …….