IMA Prime Times: June 2019 Iowa Mortgage Association

June 2019

Reasons to Be Positive Despite Rising Cost of Loan Origination
While volume rises the underlying question of whether we are making money in the mortgage business continues to be a question in many minds. There has been a significant increase in the cost to originate a loan, rising to a height of $9,584 per loan according to the Mortgage Bankers Association. As regulation and compliance has increased, so has the number of people and processes that are required to complete a loan for sale. 

There is good news. The MBA recently reported an increase in profitability for independent mortgage bankers for Q1 of 2019. The MBA reports that independent mortgage banks and chartered banks reported an increase of $285 on each loan they originated during Q1. Home equity is also rising as of Q1 2019. According to a June 6 Federal Reserve report, owner occupied property values increased by $26.1 trillion in Q1 of 2019. Homeownership rates are also at their highest level of 60.4% since 2002. 

This increase in equity and a decrease in interest rates could easily set us up for a refinance bump over the next few months. Now is the time to go through databases of old loans to identify who would be in a great position to refinance. Cash-out refinances are now seen as life event loans by many consumers. They are using their equity for renovations, college expenses or retirement planning. Consumer spending accounts for nearly 70% of the nation’s economy, and many Iowans like to make upgrades to their homes during the summer. Now is the time to rethink refinance strategies and market to those who may be in the mood to cash out. When looking for ways to increase profitability and volume, be sure to work both purchase and refinance campaigns this summer.

Laura Kay Sheely
Arch Mortgage Insurance

Submit Nominations for Mortgage Professional of the Year by Aug. 1
There is still time to submit your nomination for the IMA’s Mortgage Professional of the Year Award. The award will be given at the 2019 Fall Convention on Oct. 8, to recognize a distinguished mortgage professional in the industry. The nomination deadline is Aug. 1, 2019. Submit a nomination.

Registration Now Open for IMA Fall Conference
Mark your calendar for the IMA’s Fall Conference. This annual event is Oct. 8-9 at the Meadows Events and Conference Center in Altoona. This year’s conference features sessions on increasing mortgage sales, compliance, social media, secondary market and more. There will also be a golf outing on Oct. 7, at Copper Creek Golf Club in Pleasant Hill.
Learn more or register.

NFIP Extended Six Months
On June 6, President Donald Trump signed into law a bill which provides for aid to address the consequences of various natural disasters and also includes an extension of the National Flood Insurance Program (NFIP) until September 30, 2019. The NFIP was set to expire on May 31 and was extended until June 14 just hours before it expired. Congress is expected to debate broader NFIP program policy matters including restructuring of the program entirely.

The Consumer Financial Protection Bureau issued a set of FAQs the beginning of June on the TILA-RESPA Integrated Disclosures. The FAQs address corrected closing disclosures and the three business-day waiting period before consummation; model forms; and construction loans. Read the FAQs.

2019 HousingIowa Conference Is September 4-6 in Cedar Rapids
The Iowa Finance Authority will host Bring it Home – the 2019 HousingIowa Conference Sept. 4-6 at the DoubleTree in Cedar Rapids. The conference will feature keynote presentations from Dallas Cowboys legend and former ESPN analyst Darren Woodson, and legendary Notre Dame football player Daniel “Rudy” Ruettiger. Sessions will cover topics such as homeownership, housing development, leadership, rental and homelessness. Learn more or register.

USDA Rural Development Expands Loan and Grant Program for Home Repairs
Iowa is one of 21 states across the nation participating in a pilot program that expands USDA Rural Development’s home repair program. Effectively immediately, the pilot program waives various regulatory requirements with the intent to increase loan and grant production and reduce restrictions that impede the home repair program, commonly referred to as Section 504 loans and grants. Additional changes include:

  • The maximum loan for a qualifying home repair increases from $20,000 to $40,000
  • The maximum grant for a qualifying home repair increases from $7,500 to $10,000
  • Title clearance/legal service requirements are waived for loans of $25,000 or less

Loans have a fixed interest rate as low as 1% and typically may be repaid over a term of 20 years. Grants are available to help applicants who are 62 or older and who cannot repay a loan, remove health and safety hazards, or make the home accessible for a disabled family member.

Examples of eligible home repair projects include but are not limited to repair/replacement of storm doors, windows, steps, furnaces, water heaters or roofs. Funds can also be used for insulation, electrical, plumbing, septic and water systems, and to make accessibility improvements for persons with disabilities. Homes repaired with these funds must be located in communities of less than 20,000 people or in rural areas.

For more information about USDA Rural Development’s home repair program, call 515-284-4667, email or visit

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