Today’s home mortgage market is characterized by a unique collection of circumstances that have accumulated on top of one another. This has created a level of strain and urgency that has never been seen before, bringing a perceptible “heat” to every sector of the industry. The mortgage lending industry’s move to working from home, which provided a big boost to the entire economy, embraced the refinance boom, and kept the American Dream of homeownership alive and well, was the great success story of early 2020.
Historically low rates increased investor activity, and a big cohort of available first-time homebuyers have resulted in soaring loan volumes during 2020 and 2021. The demand to innovate and adapt, on the other hand, has never been greater. As a result, lenders are juggling the requirement to handle historical volumes with the need to keep up with technological improvements in order to stay competitive. As a result, many lenders’ offices feel as if they have been pushed to their limits.
The pressure to fabricate income, employment, liabilities, or occupancy is increasing in a market where it is becoming increasingly difficult for borrowers to qualify for a loan. As a result, defects at the loan level are on the rise, as is the frequency of Suspicious Activity reports. Similarly, we have lately seen fraud for profit schemes in the courts, where unscrupulous builders and brokers have taken advantage of desperate consumers looking to buy a home.
The lending industry depends on trust in the integrity of its transactions, regardless of the attack vectors. Therefore, residential mortgage origination safety and soundness are pillars of today’s lending. As lenders deal with the numerous challenges they face, it will be critical that they seek solutions that strike a compromise between improving workflow and assuming greater risk.
Lenders are facing several challenges to keep market share and stay above the numerous fraud risks. To read more, click the link below:
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