With homeownership at a 50-year low, everyone is working on finding ways to bring more home buyers to the closing table. Like everything else in life, the solution will involve removing obstacles and providing incentive.
As for obstacles, Housingwire recently reported on a new White Paper released by the National Association of Realtors, entitled “Hurdles to Homeownership: Understanding the Barriers.” In it’s paper, NAR outlines five obstacles to increased homeownership. No. 1 on it’s list: Post-Foreclosure Stress Disorder.
There are long-lasting psychological changes in financial decision-making, including housing tenure choice, for the 9 million homeowners who experienced foreclosure, the 8.7 million people who lost their jobs and the young adults who witnessed the hardships of their family and friends, NAR explained.
In our minds, this is largely a crisis of faith. They have lost faith in our industry and in their own ability to make a decision of this magnitude that will impact them over such a long period of time. Without trust, they will not return to the real estate market.
Trust starts with truth. When we can tell borrowers exactly what they can expect to pay at the closing table in order to get the keys to their new home, we’ve taken a step toward building the trust that will allow us to close the deal.
It says something about the magnitude of the crisis that even with the CFPB’s TRID rules that require the lender to tell borrowers almost exactly what they will have to pay to close, consumers are still turning to popular websites for this information. The “Average closing costs by state” graphic at Bankrate.com is a good example.
Don’t make your borrowers settle for an estimate before they decide whether they can afford to go shopping for a new home. Sell your TRID Loan Estimates like the sales tools they should be instead of thinking of them as another regulatory burden. When you get the numbers on the LE right, you build trust and that leads to closed loans.
We help more lenders than anyone in the industry get the LE right with our patented closing cost and fee engines. Find out more today by visiting our website.