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46 SOUTH LEADS NATION IN PRICE GROWTH Pending home sales inched up 0.5 percent during the year according to the Pending Home Sales Index released by the National Association of Realtors (NAR). e Pending Home Sales Index is a monthly forward- looking indicator based on contract signings. e index moved higher by 0.5 percent to 110.1 in December from an upwardly revised 109.6 in November and also reached the highest level since March 2017, where the index had touched 111.3 points. ese modest increases point toward a rise in contract activity as well as interest of aspiring buyers who are being encouraged to look for new homes at the prospect of rising mortgage rates looms. "Sadly, these positive indicators may not lead to a stronger sales pace. Buyers throughout the country continue to be hamstrung by record low supply levels that are pushing up prices especially at the lower end of the market," said Lawrence Yun, Chief Economist at NAR. According to NAR, the uninterrupted supply and demand imbalances across the U.S. fueled price appreciation that rose to 5.8 percent in 2017. is price appreciation reflected a sixth straight year of gains at or above the 5 percent appreciation level. "While tight inventories are still expected to put upward pressure on prices in most areas this year, we expect overall price growth to shrink, with some states experiencing decline because of the negative effects of the changes to the mortgage interest rate deduction and state and local deductions under the new tax law," Yun said. In terms of regions, the Southern region showed maximum growth with the index reflecting a year over year growth of 4 percent. e region registered a growth of 2.6 percent to 126.9 points in December 2017. At the other end of the spectrum, the growth in the West was 3.1 percent down compared to a year ago, even though the index rose 1.5 percent on a month over month basis to 101.7 points. e Pending Home Sales Index for the Northeast region declined 5.1 percent to 93.9 points in December and was 2.7 percent below its year ago growth. e Midwest index decreased 0.3 percent to 105 points but was still higher by 0.3 percent compared with the year ago period. LENDER REPORT WEIGHS IMPACT OF LEADERSHIP CHANGE AT CFPB Lenders in the residential mortgage space are hopeful the new leadership at the Consumer Financial Protection Bureau (CFPB) will open the doors to a wider dialogue between the agency and the industry, according to the STRATMOR Insights report. e report studies the impact of these leadership changes on the mortgage regulatory landscape, specifically on the TILA RESPA Integrated Disclosure Rule (TRID). Despite regulation expanding with the new HDMA guidelines that took effect in January 2018, the trend seems to be going away from "regulation through enforcement," making lenders more hopeful of a positive dialogue with CFPB. "If it comes to fruition, the move away from "regulation through enforcement" would be a huge benefit to lenders who continue to act as if they are but one mistake away from a CFPB penalty and having their networth slashed," said Rob Chrisman, Senior Advisor at STRATMOR. e report also studied the initial costs of TRID-compliance with lenders who were surveyed, pegging the cost at $209 per loan. However, they projected this cost to decline to $160 per loan net of costs recovered through additional loan charges. "e initial implementation steps for TRID did not go well, especially in setting expectations with settlement agents," said Chrisman. "And, TRID increased the per- loan costs and impacted approval-to-close cycle times in such a way that it wasn't clear, long-term, what the overall costs would be." In a related article in the report, Matt Lind, Senior Partner at STRATMOR, analyzed the scale, scope and impact on borrower satisfaction of problems that occur during loan origination. "One out of six borrowers experiences one or more problems during loan origination, which causes a significant drop in satisfaction, especially if they are not resolved," Lind noted. e report also indicated that increased communication between borrower and lender, a key TRID goal, significantly improved overall borrower satisfaction rates. "CFPB rules have, overall, had a positive impact on borrowers and lenders," said Chrisman, citing STRATMOR's MortgageSAT data that shows significant improvement in borrower satisfaction scores when borrowers are contacted prior to a loan closing.

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