RTC Mortgage Blog

What's Happening in Mortgage Lending?

March 3rd, 2016 3:30 PM by Richard T. Cirelli

What's Hot in Mortgage Lending?

I’m witnessing an interesting continuance of last years’ trends in mortgage demand over the past few months. So, while nothing is really new, certain patterns exist that are worth talking about.

Jumbo Loans
The proliferation of Jumbo lenders and products persist – all for the good. Rates are about the same as they are for their smaller “conforming” counterparts. More lenders are entering the arena as rates remain low, the purchase market remains strong, refinance opportunities rise, underwriting criteria loosens, and the secondary market for securitization of jumbo  loans expands.

Reverse Mortgages
This loan product has seen the biggest increase for RTC Mortgage during the past year for this once unpopular product. The reason is simple: the Reverse Mortgage loan has been re-designed such that it is no longer a product just for the desperate seniors that are out of money. It is now considered a valuable financial planning tool that is being endorsed by financial advisors and accountants that understand and endorse the benefits. The most popular feature being touted is the Line of Credit that grows in value over time.

Reverse Mortgages can be used for purchases too. There are too many features to go over here and with so many options within the Reverse Mortgage program, everyone’s benefits are different. If you or someone you know is interested, give me a call and I can easily work up some figures to demonstrate how it may work for you.

The Domination of Non-Bank Lenders
As mentioned in previous emails, the major banks have lost their large share of the mortgage market to “Non-Banks, including Mortgage Brokers. Market share for Non-Banks has grown from a low of 10% in 2007 to 50%. The reasons are that non-banks have more products; better rates and terms; more efficient and local service; and usually more expertise among the originators.

Loosening of Underwriting Guidelines
Not only have I seen looser guidelines among the Jumbo lenders but now, the Government Agencies of Fannie Mae and Freddie Mac have finally loosened many of the guidelines and restrictions that were imposed during the mortgage meltdown period around 2008. The underwriting changes are long overdue but welcomed. If you didn’t qualify before, you may qualify now.

This was the big Regulatory change that was going to delay all loan closings and scared the heck out of everyone in the business. Now that we have had some time to adjust, it seems to be working out just fine. That said, some lenders are much better than others at performing. But as a broker that can submit loans to many lenders, we know who does a good job and who doesn’t. With borrowers that are pre-approved in advance, we can still easily close loans within 30 days.

Commercial Real Estate
Now that I co-own a commercial mortgage company with long-time commercial lending expert Jeff Redeker, I’m much more aware of commercial real estate and lending. I’ve read many published articles about the strength of the commercial market too. Our company is doing well and has financed quite a few commercial properties including multi-family, offices, restaurants and more. Beach Cities Commercial and RTC Mortgage are located in the same office building. Give us a call if you have an interest in financing a commercial building or business.


Posted in:General
Posted by Richard T. Cirelli on March 3rd, 2016 3:30 PM



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