This year, the mortgage business will see a shift in trend forecasts, as experts informally name a “color of the year” in the industry. For example, affordable, underserved, accessible, and equity are all current keywords in the mortgage sector. In addition, mortgage lenders must have a plan to help the underserved, given the increased regulatory focus on expanding affordable lending programs.
Many lenders have previously been hesitant to offer a diverse range of affordable lending products, such as down payment assistance (DPA) programs and ITIN mortgages. Surprisingly, the risk isn’t the primary driver of lenders’ interest in DPA and low-cost Lending today. The difficulties associated with DPA and inexpensive lending solutions truly hold lenders back.
The advantages of a vibrant and current DPA and an inexpensive financing program are numerous and uncountable, brightening many people’s lives. However, those phrases don’t necessarily translate easily to a profit and loss statement, so many lenders must justify the benefits of these programs in words other than pure statistics.
Lenders have a greater potential to help low-to-moderate-income borrowers achieve their goal of homeownership through DPA and affordable lending programs. Still, these programs also allow lenders to reach borrowers who may otherwise be ignored or rejected, which can be crucial in a contracting market. Some lenders may respond by launching new products, such as ITIN mortgages, to allow non-U.S. citizens possessing an ITIN, or individual tax identification number, to become homeowners.
The problems of providing DPA and inexpensive loan services have long overshadowed the potential benefits for many lenders. To read more, click here.
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