Digital Banking Catching on with Consumers

In a sign that consumers are embracing digital banking, more than 72% of consumers reported they felt comfortable syncing their personal finances on their mobile phones.

Over 60% of consumers use financial apps for everyday banking, such as viewing account balances, budgeting and tracking expenses, or paying bills and transferring money, according to a survey from Webpals Mobile.

Fully 26% of them are do most of their banking digitally, and that statistic is steady across generations, for instance: Generation Z, 33.6%; Millennials, 27.7%; Generation X, 23.3%; baby boomers, 25.4%. However, just 10% use personal finance apps to apply for loans or mortgages.

Other highlights from the report are as follows:

  • Men were twice as likely as women to use financial apps for investing.
  • Millennials, 53%, are almost twice as likely as baby boomers, 27%, to use financial apps for depositing checks.
  • Older respondents reported more distrust of synching financial apps to their phones: Gen Z, 9.7%; Millennials, 13.1%; Gen X, 14.8%; baby boomers, 23.3%.
  • Only 10% of respondents have downloaded a financial app but never used it.
  • One-third of respondents reported to having no other personal finance appdownloaded on their phone other than their bank's app

Fully 56% of respondents reported that they feel the level of customer service on apps is equivalent as in person. Gen X is most likely to feel customer service is better on a finance app than it is in person, with almost 30% of respondents agreeing apps are superior when it comes to advice and information.

At a time when banking is going digital, app developers should remain cognizant of the importance of consumer trust, providing safe and efficient mobile banking services that rival, or even trump, that of traditional banks.

"This survey highlights just how trusting consumers have become with their mobile applications," said Inbal Lavi, CEO of Webpals. "Today's banking customers want the ease of financial apps but the same trust and respect they have been accustomed to with traditional banking. While potential customers are often familiar with brick and mortar branches, we can expect to see a steady increase in the rise of mobile finance consumers."


FHFA Names Roscoe Chief of Staff

The Federal Housing Finance Agency appointed John Roscoe to serve as chief of staff. He will report to Joseph Otting, acting director of the agency and assume his new position on Feb. 4.

“John is a dynamic and collaborative leader with a track record of success. He brings to the position the solid judgement that comes from working at a very high level across all ​branches of government,” said Otting.

The timing of Roscoe’s appointment, however, might not be coincidental.

That’s because just days after joining the agency in early January, Otting told FHFA employees and at least one reporter that a plan to remove Fannie Mae and Freddie Mac from conservatorship is imminent.

Those comments were not well received by some high-ranking Democrats.

[caption id="attachment_9328" align="alignleft" width="237"] Sherrod Brown[/caption]

Rep. Maxine Waters, D-CA., and Sen. Sherrod Brown, D-OH, wrote to tell him that they hadn’t seen “a comprehensive statement from the White House and Treasury Department under the Trump Administration providing their views on regulation of the housing finance system.”

Also, they want to understand how the plan would affect underserved communities, such as low- and moderate-income households, rural areas, affordable rental housing, and manufactured housing. So, helping Otting avoid political entanglements like this one, could be one of Roscoe’s responsibilities.

Waters is chairwoman of the House Financial Services Committee, and Brown is ranking member of the Senate Committee on Banking, Housing, and Urban Affairs. Otting is also the Comptroller of the Currency.

Roscoe joins FHFAfrom the White House Office of Presidential Personnel, where he was special assistant to the president. His work has helped shape economic, trade and regulatory policy. Before joining the White House, Roscoe served in senior positions in the private sector and the Ohio state government, including in the treasurer’s office.

“I am honored by this appointment and look forward to working with Acting Director Otting and the highly respected FHFA team,” said Roscoe.


MBA: Mortgage Apps Drop 3%

Mortgage applications decreased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending January 25, 2019. This week’s results include an adjustment for the Martin Luther King Jr. Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 7 percent lower than the same week one year ago.

“Mortgage applications for purchase and refinances were lower over the past week, as rates nudged higher,” said Joel Kan, MBA’s Associate Vice President of Industry Surveys and Forecasts. “After two weeks of decreases, the purchase index still remained roughly 6 percent above its long-run average, which is good news with the spring buying and selling season almost underway. Despite ongoing supply and affordability constraints, the healthy job market and underlying demographic fundamentals both point to gradual purchase growth in the coming months.”

[caption id="attachment_8412" align="alignleft" width="144"] Joel Kan[/caption]

The refinance share of mortgage activity decreased to 42.0 percent of applications from 44.5 percent the previous wee adjustable-rate mortgage share of activity decreased to 7.9 percent of total applications.

The FHA share of applications remained unchanged from 10.5 percent the week prior. The Veterans Affairs share of total applications increased to 10.7 percent from 10.3 percent the week prior. The Department of Agriculture share of applications remained unchanged at 0.4 percent compared to the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.76 percent, from 4.75 percent, with points increasing to 0.47 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.60 percent from 4.59 percent, with points decreasing to 0.24 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.77 percent from 4.82 percent, with points decreasing to 0.58, from 0.62 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16 percent from 4.12 percent, with points decreasing to 0.46 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 4.14 percent from 4.12 percent, with points decreasing to 0.37 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.


CFPB: Servicing Was Borrowers' Top Complaint

Borrowers complained more to the Consumer Finance Protection Bureau about mortgage servicing issues than any other problem with their mortgages.

Fully 11 percent of the complaints the bureau received were mortgage related, and 42 percent of them were from borrowers that had “trouble during [the] payment process,” according to “Complaint Snapshot: Mortgage” from the CFPB.

According to an analysis of complaints the CFPB received between Nov. 1, 2016 and Oct. 31, 2018, borrowers were most likely to complain about their statements, payments, escrow accounts and payoff requests.

  • Complaints describing issues with periodic statements suggest some consumers are not receiving statements on time, resulting in a lack of information about whether payments were applied to their balances or the status of loans. In some of these complaints, consumers attributed a missing statement to a recent transfer of servicing of the loan. Other consumers complained of periodic statements containing inaccurate account information such as late fees assessed to their loan despite payments made on or before the due date.
  • Borrowers complained about servicers not applying payments to their loan account as intended. For instant, despite submitting extra payments with instructions to apply them to principal, payments were either misapplied or held in an unapplied funds account and applied only after the servicer was contacted.
  • Consumers complained of escrow account analyses indicating a shortage of funds. In these complaints, some consumers stated they received an escrow analysis statement that indicated a shortage because of an increase to hazard insurance, taxes, or both. But after researching their tax bill or hazard insurance premium, they did not find an increase in costs, and therefore, considered the escrow shortage unwarranted.
  • Some consumers complained of payoff information requests that were either not addressed or that were inaccurate because the consumer did not receive the information on time. In some of these complaints, consumers reported multiple unsuccessful attempts to obtain payoff information, or an inaccurate payoff amount delayed their attempt to pay their loan in full.

Compared to the monthly average compiled over the past 24 months, borrowers submitted 18 percent fewer mortgage complaints in October 2018. And there were 15 percent fewer mortgage complaints from August to October 2018, compared with the same period a year earlier.



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