McHan and nationally recognized mortgage expert Rob Chrisman, spoke to approximately 100 Tri-Valley Realtors and mortgage brokers Jan. 29 in a presentation hosted by Opes Advisors. Chrisman is a mortgage industry veteran who, among other pursuits, publishes a widely read daily mortgage market commentary.
McHan said that Opes Advisors, which specializes in residential mortgage banking and investment management, is forecasting 2014 to be "hot because of the lack of inventory" of existing homes. She also predicted a "rash of building in 2014 because we are behind" in new home construction.
Chrisman spoke specifically about the 2014 mortgage industry and how the Qualified Mortgage (QM) rule is going to affect it.
The QM rule became effective Jan. 10. A qualified mortgage is a home loan that meets certain standards set forth by the federal government, including the Ability-to-Repay rule mandated by the Dodd-Frank Act.
Chrisman told the audience, "QM is not excluding buyers" but was instituted to prevent another credit meltdown. "What government interference has done is set barriers."
The Mortgage Bankers Association is forcasting a 30% to 40% decrease in mortgage originations year-over-year, mostly because there was a tremendous number of refinances in 2013 that won't happen this year, and there aren't as many homes on the market.
An audience member brought up that inventory might be down because of a perpetuating cycle; they don't want to move because they don't know where they would go. Another audience member said there is also a perception that it is now too difficult to qualify for a mortgage.
According to Bob Nutcher, managing director of Opes Advisors Pleasanton branch, QM is not a hinderance. "If you have good credit, a good work history and money in the bank," Nutcher said, "you're going to get a loan."