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Hispanic Home Ownership Is and Will Continue to Fuel the Home Buying Market

It all boils down to numbers. Between 13.9 and 15.9 million new households are expected by 2027; the next ten years are projected to be the strongest in US history for the housing market. The upsurge will be created primarily by two new groups of homeowners: Millennials and Hispanics.

 Why the Surge in Demand?

The 2008 financial crisis had a severe impact on Baby Boomers while Millennials were either renting or still living with their parents. The influential Hispanic population is now entering the middle class in more significant numbers than ever before. Because Millennials are making the switch from renting to buying far later than previous generations (around ten years later), the surge in new Hispanic homeowners and young homeowners are likely to coincide.

In addition to these factors, the improving economy and the growing number of high-paying jobs will encourage Americans of all ages and backgrounds to invest in home ownership.

Cultural Breakdown

A study called Housing Demand: Demographics and the Numbers Behind the Coming Multi-Million Increase in Households were conducted by the Mortgage Bankers Association. Not only does it predict a massive upsurge in housing demand, but it also identifies where the demand originates.

The following numbers identify the projected increase in home ownership in 2027 when compared with 2017:

Hispanic households: 5.5 to 5.7 million

Non-Hispanic White households: 3.4 to 5 million

Asian households: 1.8 to 1.9 million

African American households: 2.4 million

Other households: 730,000 to 890,000

Surprisingly, there’s also growth expected from Baby Boomers, around 12.5 million to be exact.

What does it all mean?

Yearly, we can expect to see an increase of 1.6 million homeowners a year. Overall, home ownership is likely to rebound from historically low levels in 2008 to a healthy 65%. This is good news for the housing sector specifically and the nation in general. What’s obvious is that the prospects for the economy are good and that mortgage loan officers, lenders, and real estate agents will prosper over the next decade.

 A Better Way to Close with BNNServices

Since 2008, BNNServices has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNNServices “touches” each and every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.

Ready to experience the BNNServices difference? Get started today!

 

 

Fannie Mae Presents Positive Outlook on Millennials and Homeownership

A research study conducted by Fannie Mae and the University of Southern California (USC) looks at millennials and homeownership from a new perspective. The study compares the past and current home buying behaviors of young adult homebuyers using cohort analysis rather than age-group analysis.

And the study reveals that millennials have actually been changing their attitudes about homeownership, with their interest increasing substantially through 2020. For example, for every age transition above the 22-23 transition to ages 24-25, the increase in cohort homeownership rate was significantly more significant in recent years.

What Is Cohort Analysis?

This method tracks increments in the homeownership rate for a cohort or group of young people as they age and advance from one age group to the next through different historical periods. Then it compares these rates for different cohorts passing through the same age transitions.

According to researchers, the traditional age-group analysis confuses recent home purchasing behavior with housing tenure choices made years ago. It not only paints an unnecessarily dark forecast for millennials’ prospects as homebuyers but has also led to a negative and inaccurate perception that millennials don’t believe in homeownership as much as those from other generations.

What Does the Study Reveal About Millennials and Homeownership?

The cohort analysis shows that home purchases by young adults first began increasing significantly leading into the year 2014. For example, those transitioning from ages 28-29 to ages 30-31 experienced homeownership rate increment gains of 5% from 2012-2014 and 6% between 2014-2016. The rate of increase has steadily ascended, leading into 2020. According to researchers, these gains were two to four times higher than gains for two older cohorts passing through the same age range.

It provides a much more positive outlook about millennials and homeownership. It also seems to contradict the assumption that millennials have less interest in homeownership than other age groups. Instead, it indicates that millennials are just as inclined to buy homes as those of different generations when economic conditions are right.
The study was conducted by Fannie Mae’s Economic & Strategic Research Group and Dowell Myers, professor of policy, planning, and demography at the Sol Price School of Public Policy at USC.

A Better Way to Close with BNNServices

Since 2008, BNNServices has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNNServices “touches” each and every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.
Ready to experience the BNNServices difference? Get started today!

What Keeps Home Buyers Up at Night

No, it’s not floods, tornadoes, or alligators, but interest rates are the common denominator among home buyers these days.

Data Shows Buyer and Owner Anxieties

According to a Berkshire Hathaway Home Services survey, eight in ten prospective home buyers thought rising interest rates were the number one challenge that might face the real estate industry. 84% of current homeowners answered the same way. Those searching for a home worried that rising interest rates and the ensuing mortgage rate increases would affect their ability to afford a home. Though interest rates are currently low from a historical perspective, they look to be on the way up. Only 20% of prospective buyers said a recent rise in rates would motivate them to make a purchase before further increases.

Gains in Employment Offset Higher Rates

All that being said, demand was there in 2021. Applications for new mortgages rose recently compared to January, driven by solid employment gains. In a perfect world, increases in employment and income continue throughout 2021 and offset the potential Federal Reserve’s incremental interest rate hikes.

Mortgage and Housing Snapshot

Now let’s take a look at the numbers.

Mortgage Application by Type

  • 5 percent of loans were conventional
  • FHA loans accounted for almost one-fifth of applications
  • VA loans were 13.6 percent of the total.

Mortgage Amount

  • Nationwide, the average mortgage amount rose to $330,208

Home Stats

Housing inventory decreases are now commonplace. The long-term inventory trend continues to drop as well, having dropped year-over-year for 21 straight months. Thanks to low inventory and affordability issues, existing-home sales will fall.

The Bottom Line

As we head into the hottest months in the real estate industry, prospective borrowers should seek preapproval from a lender, understand their budget, and start working with a realtor about their housing needs. The early bird gets the worm!

As for lenders, caution remains supreme and probably will for some time. Though the new administration in Washington has not been hawkish toward the banking world, the Consumer Financial Protection Bureau remains in existence. It continues to enforce fair lending standards, TRID, RESPA, and other regulations. 

A Better Way to Close with BNNServices

Since 2008, BNNServices has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNNServices “touches” each and every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.

Ready to experience the BNNServices difference? Get started today!

Top Mortgage Fears of Prospective Borrowers

Taking out a loan can be a daunting, overwhelming process. Many prospective buyers have serious mortgage fears. Here are their top concerns:

Not Qualifying Due To Bad Credit

As we all know, lenders check prospective borrowers’ credit when they apply for a mortgage. Customers with a high credit score, i.e., between 760 and 850, will qualify for the best interest rates. Lower than 650, though, and they will probably require the applicant to take some time to repair their credit before applying again. Having good credit is only one part of the equation; however, customers may not understand that there are other factors that lenders take into consideration.

Inability to Afford a 20% Down Payment 

A significant mortgage fear that home buyers have is not having enough money for the down payment. Many people assume that a payment of 20 percent is mandatory to qualify for a mortgage; however, that isn’t true. Borrowers can, alternatively, pay private mortgage insurance (PMI), which ranges from approximately 0.3 percent to 1.15 percent of the mortgage. Paying the 20 percent down payment saves homebuyers money in the long term. It is far from the truth, though, that the down payment can disqualify them from taking out a mortgage.

Having Too Much Debt

Many borrowers worry that having too much debt means that they won’t qualify for a mortgage. According to NerdWallet, the average household with credit card debt has an outstanding balance of nearly $17,000. Student debt is sky-high, with an average of almost $29,000 per borrower. Being in debt does not necessarily mean that he/she won’t qualify for a home loan. What matters is their debt-to-income ratio (DTI). As long as they are below 36%, most lenders will qualify them for a mortgage. If they exceed 36%, though, they can reduce the size of the mortgage to improve their DTI.

A Better Way to Close with BNNServices

Since 2008, BNNServices has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNNServices “touches” each and every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.

Ready to experience the BNNServices difference? Get started today!

 

BNN Services: How To Achieve an A+ Rating at the BBB

BNN Services is proud to have an A+ Rating from the Better Business Bureau (BBB). Perhaps you’ve seen other businesses tout their good ratings as well. But what do they mean? How prestigious are they? And what exactly sets companies that receive A+ Ratings apart from the rest. You’re in the right place to find out!

The Better Business Bureau: A Short History

The BBB has an impressive 100-year history of protecting consumers, regulating businesses, and strengthening marketplace trust. Founded in 1912, this non-governmental, nonprofit consists of over 110 independent chapters throughout America and Canada, with an international headquarters in Arlington, VA.

In addition to its active work in mediating disputes between organizations and customers, handling over 850,000 cases per year, the BBB also maintains a nationwide database of letter-grade (A+ through F) business ratings to allow consumers to make informed choices on their purchase habits. The organization’s website states that these ratings are based on information the Bureau can obtain about the business, including public complaints and adherence to the Code of Business Practices. But what are the specific factors considered when these ratings are assigned?

BBB Ratings: The Formula

The BBB’s rating system consists of a proprietary formula that weighs 17 different factors. Many of these factors are quantitative (i.e., measurable and systematic), such as the business’s field of operation, its length of existence, professional licensing, and the total number of formal complaints (adjusted by an overall number of customers served). Other examples include the number of complaints whose resolution was delayed or dropped, government sanctions, and a sustained failure to address complaints. The other ranking factors are more qualitative and up to BBB regulators’ judgment, such as the relative severity of the complaints, truthfulness in the business’s advertising policies, and the extent and quality of available background information.

Weighting

In almost all cases, the BBB rating is driven by consumer feedback (specifically that of complaint history). While the 17 factors are each separate and discrete, they are weighted differently. Ultimately, nearly 85% of the final score is determined by the Bureau’s verification and evaluation of customer complaints, as well as the business’s proficiency in resolving them.

A+ BBB Ratings: An Indicator of Excellence

A business to receive an A+ rating will exhibit consistently excellent customer service and proactive dedication to resolving any problems. As mentioned, this consumer care portfolio is the single most crucial factor in determining the final grade. Other “bonus” factors can also work in a business’s favor, such as length of operation (indicating experience and trustworthiness), professional accreditation on the part of the staff or overall company (demonstrating proficiency in its chosen field of industry), and willingness to make information publicly available (indicating confidence in its operational integrity).

A Better Way to Close with BNN Services

Since 2008, BNN Services has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNN Services “touches” every file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.

Ready to experience the BNN Services difference? Get started today!

Adoption of Remote Online Notarization: A General Counsel’s Opinion 

Though remote online notarization existed well before coronavirus, this modern alternative failed to gain momentum until the pandemic hit. With social distancing guidelines in place, many turned to RON to promote safety and convenience. The urgency for RON caused many providers to scramble, resulting in creative solutions and heightened collaboration. In a recent interview, Rick Hecker, the underwriting counsel at Conestoga Title, details the hardships that accompanied the unceasing RON inquiries during the rise of COVID-19.

 When coronavirus became a threat, Hecker states that most of his time consisted of fielding RON questions. In March and April, specifically, it was seemingly impossible for Conestoga to stay afloat. With so many title and escrow agents making daily requests, Conestoga could not fulfill ongoing RON needs. Fortunately, now that we have had a year to adapt to the pandemic’s unrelenting challenges, RON providers like Conestoga have found a light at the end of the tunnel. 

 From Pennsylvania and Maryland to Virginia and Kentucky, Conestoga underwrites in several states. Each state has different RON legislation, which is why many title and escrow businesses struggled to understand remote online notarization at first. In Pennsylvania, in particular, the temporary nature of RON orders has proven a stumbling block. However, most states have more permanent legislation, so several agents experienced little to no setbacks when COVID-19 arrived. 

 As more title and escrow companies look to invest in RON, Hecker warns that not all RON platforms are the same. To ensure that businesses make the most sensible decision for their operations, Hecker recommends looking into the user-friendliness and integration of RON platforms. According to Hecker, breathing simplicity into the consumer experience is of paramount importance. If a client has a difficult time navigating the software, they will return to traditional methods. 

 With that said, companies should test out a product before implementing it. Not only does this bode well for increased understandings, but it also allows agents to determine how straightforward the software is. Above all else, businesses need to integrate RON into their procedures seamlessly. The only surefire way to do so is by pairing it with existing software. Some systems boast all the bells and whistles, making them highly sought-after and compatible with current programs. 

 Hecker maintains that consistency is vital. In other words, if a RON platform does not compliment your present applications, it will not be successful. As a strong proponent of this platform, Hecker urges businesses to look into comprehensive title production software adaptable to our new environment. With good insight and a thorough approach, Hecker knows that the future of RON can look exceedingly bright. 

 Better Way to Close with BNN Services

Since 2008, BNN Services has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNN Services “touches” every file 8 or 9 times to ensure the process moves forward free of delays.

That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.