Posted on 10/22/2013 8:25:54 AM PDT by whitedog57
Kate Berry has a nice article entitled “Lenders’ Dilemma: Invest in Tech or Exit Mortgage Business.“
The cost to originate a home loan is skyrocketing as lenders try to comply with stricter rules to catch problem loans, and some community banks and independent mortgage lenders are now facing a stark choice: invest in technology that would help automate the loan process or exit mortgage lending entirely.
Origination costs are expected to rise 11% this year from a year ago, to nearly $5,900 per loan, as lenders scramble to meet tough new requirements from the Consumer Financial Protection Bureau, the Federal Housing Administration and Fannie Mae and Freddie Mac that take effect in January. That’s on top of costs lenders have already incurred in recent years as they have added staff to better ensure the accuracy of loan files. In 2007, the average cost of originating a loan was about $3,700.
AB102213COST
But there is an additional cost: frequent lawsuits from the government and affordable housing activists. Such as JP Morgan Chase’s $13 billion mortgage fine.
The Federal government and attorneys general are making mortgage lending very difficult, due to compliance and litigation costs.
Are we surprised about the decline in mortgages outstanding in the US?
usmtgdebtot
Particularly when coupled with flat mortgage purchase applications and declining real median household income? Purchase applications are in gold, declining median household income is in purple.
onechartmba
Sorry, I’m not feeling sorry for Wall Street. They took the easy way out, and these fines are nothing more than speeding tickets to them.
“Kate Berry has a nice article entitled “Lenders’ Dilemma: Invest in Tech or Exit Mortgage Business.“”
Yes, she does.
And what you have done is to rip it off, stick it on your blog and claim to be the author of it.
Well played.
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