Home Equity Loan Fever Will Offset Cooling Refi Market

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Home equity loan fever, a replacement for the overheated re-fi market, and the need to find and nurture top talent are three of the trends being forecast for this year Lee Howlett, CEO of Integrated Loan Services.

Rounding out Howlett's annual predictions for the mortgage lending inudstry are:

1. Desperately Seeking Home Equity Loans-2005 will be the year of the home equity loan. "Expect to see those lenders that have not adequately targeted the purchase money market desperately seeking originations of home equity loans as a means to build their portfolios and fill overstaffed production pipelines that grew to meet the re-fi trend. Building those home equity channels quickly enough and with the right innovative tool set will be a huge challenge."

2. Less Volatility in Interest Rates "Look for the prime interest rate to top out at 5.5% in 2005 and fixed, 30-year rates to stay at or below 7.5%. The coming year should see a less volatile marketplace for escalating interest rates."

3. Fall-out From the Death of the Re-Fi Market. "Rapid declines in this market will continue to significantly impact the title industry."

4. Technology Investment To Accelerate. "The continued seamless integration of systems to create the 'single keystroke solution' will continue to be the goal of technological advancement. Look for the ability to further extend scoring models from credit-only into fraud detection and accelerated services ordering.

5. Offshore Outsourcing To Expand. "Today, we're outsourcing to India; tomorrow you can expect it to be China. Ignore these trends at the risk of losing market share."

6. The Year of Alternative Origination Channels. "Expect to hear this announcement during 2005: 'Please come downstairs after church today for a new home mortgage. You'll find it at the table next to the youth group bake sale.' Alternative, niche origination channels-from religious organizations to fraternal and ethnic organization-will take hold this year."

7. Developing and Retaining a Skilled Workforce Will Hold The Key to Success. "Finding and keeping skilled people capable of fast decision-making and possessing the ability to work across wide platforms will be the difference between growth and failure in 2005."

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