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Tag Archives: Credit Standards

Mortgage Closing Rate Hits New High in August

Examining a sample of loans initiated in May, mortgage technology provider Ellie Mae calculated a closing rate of 61.1 percent for all loans in its August report, up from 57.7 percent in July's report. "The closing rate in August was the highest since we began tracking this data three years ago," said Jonathan Corr, president and COO of Ellie Mae. "This was further indication that lenders are working every deal and making sure leads don't slip away."

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Large Lenders Anticipate Slight Easing in Credit Standards

In a survey of mortgage lenders over the third quarter, Fannie Mae found 85 percent of senior executives believe it would be difficult for most Americans to get a home loan in today's environment, up from 81 percent in the second quarter. To compare, only 50 percent of consumers polled in the company's August National Housing Survey said they think securing a mortgage would be difficult. Lenders were also more sour on their outlook for purchase mortgage demand over the next three months.

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Mortgage Credit Availability Tightens in August

MBA's Mortgage Credit Availability Index (MCAI), a gauge of credit access based on borrower profiles and underwriting criteria at lenders nationwide, slipped to 116.1 last month from 116.4 in July, the group reported. A decline indicates tighter standards overall in the market. Both the conventional lending and government-focused indices edged down as well, each declining less than a percentage point from July.

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Mortgage Closing Rate Drops from Record High

Despite a slight easing in credit standards, the percentage of loan applications closed in July slipped to a three-month low, Ellie Mae reported Wednesday in its monthly Origination Insight Report. Tracking loan applications initiated 90 days prior, the company calculated an overall closing rate of 57.7 percent last month, down from 60.7 percent in June and 57.8 percent in May.

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Recalibrated Credit Model Expected to Raise Scores

The company responsible for one of the most widely used measures of credit health is making changes to its current model that could boost credit scores nationwide. While the changes may have a significant impact on approval rates for credit cards and auto loans, the effects will be more subtle for borrowers and lenders in the mortgage space, says Greg McBride, chief financial analyst for personal finance website Bankrate.com.

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ATR, QM Aren’t Majorly Impacting Prime Mortgage Market

The ability-to-repay and qualified mortgage (QM) rules that went into effect earlier this year are not having a significant impact on approvals of prime conforming residential mortgage loans, but they are impacting the jumbo and nontraditional loan markets, according to the July 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices conducted by the Federal Reserve.

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Mortgage Credit Loosens in July Index

The Mortgage Bankers Association (MBA) reported a 0.5 percent increase in its Mortgage Credit Availability Index (MCAI) for the month of July, putting the index at 116.4. According to the group, the main force behind the increase was a rise in the number of jumbo adjustable-rate mortgage (ARM) programs. Also contributing to the pickup was an increase in availability of high-balance FHA and VA loan programs.

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Large Lenders Loosen Credit Standards, Small Lenders Tighten Up

Credit standards at large lenders appear to be loosening somewhat, while criteria at small and mid-sized lenders appear to be tightening, according to a new survey from Fannie Mae. Lenders that reported tightening credit standards most often stated "changing regulatory requirements" as the rationale for their stricter standards.

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Lenders Step Up as June Closings Rise

While the time it took to close a loan in June increased just slightly from the previous month, the closing rate reached a record high of 61 percent, according to Ellie Mae's Origination Insight Report. Among loans originated 90 days before the report, 60.7 percent closed in June, the report states. This is up from 57.8 percent in May. "Clearly, lenders are working harder than ever to convert and close loans," said Jonathan Corr, president and COO of Ellie Mae.

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