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The housing cycle is recurrent, but the problem is that no one really knows when the tide will begin to shift to the next phase of the cycle. At one point, there’s plenty of housing available at affordable prices, and then things begin to tighten. If experts are correct about housing inventory levels in 2020, it appears we’re entering the latter stages of that cycle.

2020 Housing Inventory Projections

There’s a good chance that the U.S. housing market will continue to slow in 2020. According to realtor.com’s latest housing market forecast, inventory levels are approaching historic lows as first-time homebuyers face issues relative to affordability.

In 2019, new home cons...

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JP Morgan Chase CEO Jamie Dimon stated in 2019 that “the threat of cybersecurity may very well be the biggest threat to the U.S. financial system.” He went on to say that his company dedicates 3,000 people and $600 million to cybersecurity each year. And there’s good reason for this.

By the end of 2018, the IBM X-Force Threat Intelligence Index reported that the insurance and financial sector was “the most-attacked industry” for three years running. Despite making attempts to remain secure, the lending industry is under attack because hackers see it as a rich source of vulnerable data and easy cash.

If your business isn’t prepared to face these threats in th...

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Reverse mortgages are an effective strategy for unlocking housing wealth for older Americans. Unfortunately, the reverse mortgage industry has suffered in the past several years due to some regulatory changes. Here is what the future might hold for this market in the next year and beyond.

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The Reverse Mortgage Market Has Struggled Recently

Reverse mortgage originations have been dropping dramatically over the past several years thanks to rule changes made by the Federal Housing Administration. In 2017, the FHA announced significant changes to the reverse mortgage program with the intent of shoring up losses that the program was suffering and causing a drain on the Mutual Mortgage Insurance Fund...

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Artificial Intelligence (AI) has been employed as a means to streamline a variety of industries, and the mortgage space is no different. While AI can help create some efficiencies and cost-savings in the mortgage process, there remains the potential for much more in the future.

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How AI Is Transforming the Mortgage Industry

The human element is always going to be an important part of the mortgage process, but a common complaint relates to issues with the customer experience. AI-powered technology is enabling mortgage lenders to create more personalized experiences and more meaningful engagements with borrowers.

For example, AI can tell a lender that, if people in a certain demographic contact the...

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The U.S. mortgage market currently consists of roughly $14 trillion in assets, making it 14 times larger than the student loan or auto markets. However, what was once dominated by banks and credit unions is now threatened by a wave of financial technology (fintech) companies that do business almost entirely online.

Between 2007 and 2014, the market share of traditional lenders has declined from 74 percent to 52 percent. This is due to a combination of increased regulations on banks and consumers' growing lack of trust in these institutions. Fintech firms such as Quicken Loans, Rocket Mortgage, and SoFi have stepped in to fill the gap and brought with them a ton of technological innovations th...

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In the future, blockchain mortgages may become more common. While this is still early technology, we’ve seen enough to know its potential.

We aren’t talking about buying and selling homes with Bitcoin, although this has surely been done. Instead, blockchain is a distributed ledger technology that brings integrity, security, and speed to financial transactions and other contracts.

Blockchain technology has already disrupted the financial industry, but it will continue to bring changes to the mortgage space in 2020 with more widespread adoption.

Blockchain Technology and the Mortgage Process

Traditional mortgage applications are filled with bottlenecks that make them notoriously ineffi...

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It would be ideal if what sellers were asking for homes and what buyers were willing and able to pay matched up, but this isn't the reality in the current market. According to a new study released by realtor.com, there is still a large gap between these two figures, and it widens even more in certain markets.

The Gap Between What Home Buyers and Sellers Want

A new realtor.com study finds that half of all homebuyers are searching for a home priced below $288,000, but this is 9.1% short of the median price of all currently available homes. This demonstrates a significant gap for entry-level buyers.

Researchers estimate that the only way to achieve a balance between what is for sale and what buyer...

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The 2017 Tax Cuts & Jobs Act created a new measure that was meant to encourage investment in certain low-income areas, or "Opportunity Zones," through various tax incentives. While enticing on the surface, the measure is full of restrictions and language that is unclear at best. Not as many investors have taken advantage of the program as anticipated, and one of the reasons could be the need for further clarification from the IRS.

Opportunity Zones Do Have Benefits...

Whether it's a single investment or an opportunity zone (OZ) fund that pools investor resources, the idea of these funds is to reduce risk even though they're putting money into so-called "risky" locales. The main attraction is t...

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Even though this nation's job numbers remain strong, slow wage growth compared to housing appreciation rates is pricing people out of homes. While U.S. home prices have gone up about 60 percent since 2012, according to the S&P CoreLogic Case-Shiller 20-City Composite Index, Bureau of Economic Analysis figures show that household income has risen just under 30 percent over the same period.

The housing affordability gap continues to widen for many consumers, but this varies depending on location. Studies show that some parts of the country are keeping pace with housing value growth by paying workers enough, and others are falling short.

What Is Considered an "Affordable" Home?

The long-used rule ...

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There are plenty of things to worry about when it comes to trends in the U.S. economy, and state of the yield curve is one of them. People fear a changing yield curve because an inverted one is a fairly sure sign of an impending recession. A flatter or reversed curve not only hurts lenders but also sends many investors into a panic.

The Yield Curve Concept

When a "normal" yield curve exists, the yield on long-term bonds is higher than those on short-term ones. This makes sense because someone lending money for a longer period would expect to get paid more for assuming that risk.

This is a simple enough concept that is illustrated in the usual rates on certificates of deposits. For example, the ...

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