As more millennials enter the housing market, mortgage bankers continue to stress improved technology as a needed element in efforts to win these consumers, according to a member survey by Lenders One Mortgage Cooperative.
The survey conducted at the Lenders One conference in March found that 40% of lenders felt that loan origination needed more streamlined approaches to coax the millennial generation into getting a mortgage. Another 27% said that they felt a reduction in paperwork through more efficient loan processing would also entice millennials.
"Millennials expect a streamlined process in how they consume all products, not just mortgage products," Lenders One chief executive Jeff McGuiness told National Mortgage News. "Rather than say we're completely out of touch with this generation and need to change, you can hone in and say it's about a more streamlined approach and work to define that."
One key to streamlining the loan process is by providing more online and mobile access for borrowers, according to 48% of the survey's respondents. Another technology-driven remedy was improved electronic communication with borrowers, which was cited by 32% of survey takers.
For millennials though, lenders felt a streamlined process wasn't the only concern: 33% of respondents felt down payments needed to be lower to attract this burgeoning generation. But don't just blame the all-time high number of outstanding student loans, McGuiness said.
"We do have a wage disparity going on relative to previous generations," he said. "To the degree that we have livable wage issues going on it creates an inability to afford a down payment."
Furthermore, the study asked respondents to explain why the uptick in refinancing activity has not been bigger. Once again, costs were cited as an issue, with 39% blaming this for the disappointing refinancing activity. A lack of interest rate movement has de-incentivized refinancing, making it harder for a refinance to pay for itself. McGuiness said the increase in regulation had added its own costs to the equation as well.
Close behind the cost of a refinance was a lack of confidence among homeowners in their future financial situation at 31%. While still representing the opinion of nearly a third of lenders, McGuiness said not too long ago you could have expected the lack of confidence to be the top reason.
"If we had this same exact question three years ago, [the results] would have been flip-flopped," McGuiness said. "People are getting more certain they're going to be able to remain in their house and make that investment in a refinance."
The survey also focused on the concerns of lenders as they prepare for the new TILA-RESPA Integrated Disclosure rule. The top concern, which 68% of respondents held, was how the rule would affect processes and workflows given the requirement of meeting a three-day window to deliver a loan estimate.
Technology again, though, reared its head as a concern: 44% of lenders surveyed said they were concerned about having the appropriate technology to handle quality control and compliance.
The survey polled 100 respondents, including mortgage banker members, preferred vendors and national program participants, at the Lenders One member conference. Lenders One is managed by Altisource Portfolio Solutions subsidiary Mortgage Partnership of America and functions as an alliance of community mortgage bankers.
