REALTY411

The Original Realty Magazine!

What’s trending in the mortgage space that investors should be watching now?

The US mortgage market continues to evolve in many ways. Whether you are investing directly in real estate, simply own a home, are invested in real estate funds, or are buying mortgage notes, it pays to watch these changes and the potential impact they can have.

Digital Mortgages
While few lenders and conduits really do digital mortgages well yet, JD Power data shows borrowers are increasingly applying for loans online. That number hit 43% in 2017, and will likely rise in 2018. While it often seems prospective borrowers are just shopping for the lowest promised rate and price, Housing Wire reports that finding a lender they can trust is just as important. That makes one of the big challenges for lenders turn into how to simultaneously blend the efficiency of digital, with trusted personal service and relationship building. It is also wise to keep an eye on how digitization of the mortgage origination process affects loan and borrower types. It may work well for some borrowers, but accidentally make it too challenging for some of the best borrowers, while opening up new avenues for fraud and mistakes.

Relaxation of Loan Underwriting
A new senate banking bill aims to break down many of the barriers the mortgage industry has recently been limited by. It would allow smaller lenders and credit unions to make more lenient loans, while still benefiting from the protections big banks get. Some fear it will loosen up underwriting too much. Others fear it won’t do enough. Some believe it could be vital for continuing to fuel the housing market and growth in the years ahead. Whether the proposed bill becomes law or not though is still up in the air though, and it may be awhile before we find out. If it were to pass, smaller institutions with less than $10B in assets could potentially become some of the best sources of mortgage loan investments.

Non-Bank Lending on the Rise
Due to the many restrictions and concerns of liability for big banks, many commercial banks have simply been funneling their capital through non-bank lenders in the form of credit lines. This has helped the non-bank lending sector to bounce back in a big way, and in many different forms than seen a decade or two ago. This has been an absolutely crucial form of funding for the US property market as a whole. It has provided essential liquidity. This dynamic though is also likely to keep changing in the near future.

Seller Financed Mortgages
Unless the mortgage market really does open up in a big way soon, seller financed mortgages will increasingly become a more essential part of the market to keep things moving. Intelligently allocated in your portfolio, these mortgage notes can be very valuable. However, it is also wise to watch out how this trend shows up. Are the borrowers selling properties with owner financing, wrap around mortgages, or lease options? These may present complications if you need to foreclose.

Investment Opportunities
Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Views: 25

Comment

You need to be a member of REALTY411 to add comments!

Join REALTY411

Our investment publication is owned by active real estate investors. Our free educational network was created to help readers grow wealth.

About

Videos

  • Add Videos
  • View All

Forum

Save up to $9,600 for every employee you hire.

Started by Larry Potter. Last reply by Larry Potter Jul 3. 2 Replies

Hello,Keeping businesses informed of new or expanded Federal Tax Programs is very important to us. We’ve identified a tax credit that Client Company immediately qualifies for and want to reach out to you personally.This program falls under the…Continue

Tags: Stryde, Solutions, GMC, Credit, Tax

FLIPPER RISK MITIGATION-Free 4 ALL

Started by Stan S-EcoFaire Int. May 1. 0 Replies

The Consortium Includes, The following discussion herein; which contains applicable information regarding if for a viable For Profit, and Non-For Profit opportunity to support local community establishments looking for a “risk-less” program for its…Continue

How can we help you in reaching your investment goals.

Started by Realty411 Magazine Dec 19, 2017. 0 Replies

Hello Everyone;Please let us know what we can do to help you in reaching your real estate goals.Thanks and have a nice day.Linda PliagasREALTY411Continue

Microcap fund

Started by Williamhawk Dec 4, 2017. 0 Replies

hello,Any recommendations? If we get a healthy pullback (though it’s hard to remember what one of those looks like) I am thinking of adding some SC or MC. I’ve had FDM on a watch list for some time ... I can’t recall why but last year I thought that…Continue

© 2018   Created by Realty411 Magazine.   Powered by

Badges  |  Report an Issue  |  Terms of Service