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Every recession is different, and the 2007-2008 Great Recession, driven by a collapse in home prices, was no exception. The current economic situation, though, is completely different, and the impact of COVID-19 on mortgage delinquency is a tricky thing to predict.

2008 Vs. 2020

First, consider what happened in 2008. Leading up to the crisis, there was such a demand for mortgage-backed securities that banks issued far riskier mortgages than they should have. Once those risks stopped paying off, the bills that came due couldn't be paid, and that cascaded throughout the system.

2020 is, essentially, large chunks of the economy simply stopping. While roughly a third of the workforce has the option...

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In 2017, as part of the Tax Cuts and Jobs Act (TCJA), state governments were allowed to designate certain low-income Census tracts, up to 25% of those tracts in the state, as “opportunity zones.” This allowed certain tax benefits, provided certain standards were met. The problem was that the plan, as passed, was very much a work in progress, and clarity hasn't arrived until relatively recently. So, how has that clarity affected investors?

The Rules

To get the tax benefits, investors have to set up what's called an Qualified Opportunity Fund, which must invest more than 90% of its assets into a Qualified Opportunity Zone Property. The property has to be “significantly” i...

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Homeownership is so quintessentially American, one of our most beloved holiday traditions involves watching George Bailey, loan officer, discover that if he weren't around to build houses, his beloved little town would be a swamp of vice. Yet that may be changing. A 2018 study found that only 38% of Millennials think buying a home is a good investment, and vast majorities state that renting is cheaper than owning. What's behind the shift?

Millennials Aren't Buying

Many Millennials entered the job market right around the Great Recession, and dpending on what metrics you use, it's never completely ended for them, as wages are still recovering. Besides, it's hard to tell somebody a house is a goo...

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There was a time, not so long ago, where if you wanted to buy or sell a house, you had to find a realtor. Buying and selling real estate required specialized knowledge, both legal and financial, not to mention access to the listings, which only realtors enjoyed. And then the internet arrived, and realtors find their role is changing, and faster than anyone expected.

Caught In The Middle

The first problem is the simplest: If an owner wants to sell, they can do so directly, no brokerage fees required. While FSBO (for sale by owner) sales are still complicated, it's much easier to find buyers now than it was before the internet. In some cases, all a seller needs to do is fill out a form and a ser...

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Politics aside, the United States holds a presidential election every four years, and we’ll be going through that process once again in 2020. There’s little argument that the upcoming election will be a contentious one. But, what does that mean for the mortgage industry and an already uncertain housing market? Here is what we know based on past experience.

Election Years Can Put a Damper on Home Price Appreciation

Several years back, the online real estate site Movoto endeavored to figure out what happens to home prices during a presidential election year. Their study of home price data from the California Association of Realtors concluded several things:

  • Home prices rose by an aver...
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Real estate agents and mortgage lenders have spent years eagerly awaiting the entrance of Millennials into the housing market. Unfortunately, that hasn’t happened as quickly as some in the industry might have wished. While this group is now the largest cohort of home shoppers, they still have some challenges and shop for homes and mortgages differently than their predecessors.

The Power of Millennial Homebuyers

Realtor.com reported that Millennials finally surpassed Gen X as the group responsible for the most mortgage originations in January 2017. By the end of 2018, Millennials accounted for 45% of all new mortgages compared to 36% for Gen X and 17% for Baby Boomers.

The National Associa...

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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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