Vaultedge Newsletter - Soaring inflation; anxiety sets in amongst lenders

May 14, 2022

Rates are rising every day. Along, with refinances that never seem to keep their head up. Inventory is contracting. Application fallouts are deteriorating. Sounds like the apocalypse is nearby. Almost every lender’s stock price is near all-time lows, making lenders rotate in a perpetual state of anxiety. The 30-year mortgage rate climbed for the ninth time in 10 weeks, as inflation and geopolitical concerns grappled with the attention of the investors and lenders alike. The Fed has been surprisingly calm at this moment. The official word from the Fed has been that this episode of higher inflation is normal and just part and parcel of the economy getting back to normal after a fairly notable, unprecedented downturn.

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There are theorists who believe that the inflation rates will take a long time to subside and the market conditions will worsen. This will impact the hyper-competitive mortgage lending domain that is still trying to adapt to the post-pandemic homebuying attributes. Customer-facing technologies, especially when we talk about LOS software are a standard for a mortgage lender’s tech stack. It may seem that investing in loan automation technology, around this time might be a bad idea, but this holds the good promise of a positive ROI.

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We have often thought that a self-employed individual must be leading a pretty fancy life. Blame it on the numerous 'influencers turned billionaires' strewn all over social media. But when it comes to mortgage lending, they are a tricky lot to deal with. Underwriters have a hard time calculating their income from the various documents-W2, tax returns, bank statements, pay stubs etc. Tom Hutchens, Executive Vice President of production for Angel Oak Mortgage Solutions feels that , "consumers don’t always realize when taking out a mortgage that the only rule applied to self-employed borrowers is two years of tax returns and a year-to-date profit-and-loss statement." Even then, sometimes the documents aren't structured and this hits the productivity of the Loan Officer. Vaultedge has recently launched Vaultedge Income Analyzer that calculates the income for W2 and self-employed borrowers within a short span of time reducing cost to company for the lenders by 54%.

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New York! New York! Frank Sinatra sang-” I want to wake up in a city, That never sleeps…”. That’s going to be my motto next week as I attend the MBA’s Secondary & Capital Markets Conference & Expo event. The event promises to address the current market outlook and policy updates, a look at the latest products and services in the expo hall, together with an opportunity to connect and learn from industry peers, and leaders that can foster your personal and professional growth. We have listed a few sessions that we think shouldn’t be missed. If you happen to be there, let’s meet for coffee?

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We had a wholesome week with prepping for the upcoming MBA event, helping leading companies with loan processing through our Encompass-Vaultedge integration platform. Hope you had a good one too.

Happy reading!

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