Tag Archives: Credit Standards

According to Ellie Mae's data, which draws from a sampling of the loan applications flowing through the company's network, purchase loan share was 61 percent in October.

In a recently released white paper, Equifax delves into undisclosed debt and offers recommendations for how to deal with a potentially difficult hazard.

The Mortgage Bankers Association's (MBA) latest analysis of underwriting criteria shows mortgage credit availability opened up in October. MBA's Mortgage Credit Availability Index (MCAI) increased 0.7 percent last month to 111.5, putting a stop to declines recorded in the previous two months. According to the association, October's gain reflects a reduction in minimum credit scores by investors on certain products; that was offset slightly by other investors reducing the availability of cash-out refinances and limiting other programs.

On net, a "moderate fraction" of banks polled in the Fed's Senior Loan Officer Survey reported easing standards on prime residential mortgages from August to October, with a net 8.8 percent saying credit standards have "eased somewhat." Among large banks, a net 26.5 percent reported somewhat looser standards. Meanwhile, however, demand has declined for both prime and nontraditional mortgages as mortgage rates bounce upward. Among all respondents, a net 7.2 percent reported moderately or substantially weaker demand.

Findings released in the National Association of Realtors├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó (NAR) annual Profile of Home Buyers and Sellers survey demonstrate what industry experts have been saying since the housing market started to pick up: Access to credit is going to have to loosen before mortgage-dependent homebuyers can make a more meaningful contribution to the recovery. According to NAR chief economist Lawrence Yun, conditions are especially restrictive for single and first-time buyers.

With Fannie Mae enacting tighter requirements on eligibility for loan purchases, experts at the Urban Institute's Housing Finance Policy Center are speaking out against the move. In a blog post on the Urban Institute's Metro Trends Blog site, the center's Laurie Goodman and Taz George said, "This change places yet another barrier in front of low- and moderate-income families, who are already facing a tightening credit box." They also commented that if Fannie Mae's intent was to reduce risk, "this was a crude way to accomplish it."

Recent findings released by online lender exchange LendingTree reveal that the financial health of prospective borrowers dipped in this year's third quarter after seeing a sizable improvement in the second. The company attributed the slight decline in borrower health to rising home prices, which boosted loan-to-value ratios across the country to a national average of 89.8 percent and put more financial pressure on potential borrowers. National health also experienced a slight drag from a dip in the average credit score of borrowers.

Mortgage Bankers Association (MBA) president and CEO David Stevens took the stage at the group's 100th Annual Convention and Expo Monday morning, reflecting on the last century in housing and shining a spotlight on today's challenges. While he notes that the government's response to the economic crisis has seen its share of successes, he also says Washington needs to recognize and take responsibility for the shortcomings of its policies, a step he believes policymakers have been reluctant to take.

Purchase share continued to inch up in September as refinances receded, according to data presented by Ellie Mae in the company's Origination Insight Report.

Mortgage lending remains tight compared to historical norms, and lending could tighten even further as the government takes steps to lessen its role in the market.