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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 38 January 2024 F E A T U R E T he U.S. population is changing. The Congressional Budget Office has reported that the nation's population growth from 2023-2053 will be increasingly driven by immigration. So, it follows that, over the next few decades, U.S. demographics will be changing. This means the borrowers the mort- gage industry serves are also changing. The "average" borrower will not look the same anymore. Less people will have traditional credit scores, and less people will be familiar with the U.S. housing market and the options available to help them buy a home. While this may sound like a chal- lenge on the horizon, it is actually a viable opportunity. Lenders that want to be successful must acknowledge these changes and adapt. Not only will borrowers need more education than ever before, but lenders will also need to expand their affordable lending options to help reach more borrowers and keep their business moving for years to come. Education A ffordable housing options can change the game for borrowers, but only if they are aware of them. There are many misconceptions about homebuy- ing and homeownership today—es- pecially regarding affordability. Most borrowers or other hopeful homebuyers believe that they must put 20% down to buy a home, some may think a 30-year fixed-rate loan is the only option, while others believe they need to have a perfect credit score in order to buy a home. How- ever, none of these things are true, and today's buyers have a range of options available to help them get into a home. With so much confusion regarding what it takes to buy a home, lenders must take the time to educate their borrowers on their options and break down any misconceptions. With a changing pop- ulation, lenders can expect to see more first-time homebuyers who, regardless of their background, will need some education on what they can afford, what the homebuying process looks like, the responsibility of owning a home, and the different options available to them for buying that home. Affordable Options S o, what affordable options are avail- able to them? There are many new and different products in the market that can help lenders get their buyers into a home. It is critical that lenders are not only fluent in these affordable options in the market, but that they start offering and promoting these products, as well. Down payment assistance: For those who don't have equity in a previous property, down payment assistance helps them get started in the housing market. Down Payment Resource reported that 33% of declined applications were actu- ally eligible for homebuyer assistance. This represents a huge opportunity to get more buyers into homes. Alternative credit scoring: Many hope- ful buyers do not have a traditional credit history, either because they are young, new to the American financial system, or simply because they have not been educated on the importance of a credit score. Using rental history or other utility LENDERS CANNOT AFFORD TO IGNORE AFFORDABLE LENDING Courtney Hess of Mortgage Cadence explains the changing face of the average American homebuyer, and how expanding product offerings can keep pace with this evolving market. . B y C O U R T N E Y H E S S C O U R T N E Y H E S S is Product Owner of GSE Relations and Integrations at Mortgage Cadence. The company's cloud-based digital lending platform was designed to provide an exceptional user experience throughout the entire mortgage lending life cycle, across all channels and products. The Mortgage Cadence platform enables lenders to work more efficiently, leveraging automation and workflow tools that deliver an excellent borrower, sales, and operational user experience.