What factors will affect loans next year, and why?
David Hrobon: TRID rules have created a paradigm shift for the real estate and lending community. It is a “buyer first” mentality today. We also see some loosening of credit, but little to no reduction in documentation requirements.
Neena Vlamis: The biggest factor will be the implementation of new government regulations, TRID, and how the loan process will work. At A and N we have been ahead of the curve and the transition so far has been seamless. It is very important that borrowers work with lenders who know how to work with these new guidelines so they don’t get caught up in the regulatory red tape.
Are there any pending changes in lending that will impact agents?
David Hrobon: HMDA reform is a major change in 2016 but that will primarily affect lenders. However, FNMA & FHLMC exemptions for the 43 percent DTI limitation expire in 2017. Unless preparations are made beforehand, this change has the potential to have a major impact on the industry. We are also seeing a significant investment in loan origination technology. This will likely result in a menu-driven solution for consumers – full service, self service, or some combination of both.
Neena Vlamis: For agents, no real changes. To avoid any impact for them they can always work with us at A and N to make their life easier.
Do you think interest rates will go up in 2016? If yes, by how much?
David Hrobon: My current guess is “yes” – up 0.25 percent before year-end and another 0.25 percent sometime before the end of summer. Note: there are many geopolitical issues that could change those predictions overnight.
Neena Vlamis: There has been talk for years about rates finally going up and that the Federal Reserve will take action to implement this. I do believe the Fed will finally start raising rates and we will see this effect on mortgage rates. But the economy is still trying to gain momentum, so I don’t think it will be a big jump.
Sean Conlon: The primary change we see affecting the housing market is the interest rate environment. It has been artificially low for quite some time which has been a driving factor in home sales. We expect rates to increase over the next 18 months yet will still be near historical lows. There are several economic factors in play that affect the timing of the rate hikes.