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Lending Standards

Purchase Mortgage Approvals Plummeted Suddenly in June

The approval rate for mortgages to buy homes dropped from 63.6 to 50.3 percent in June, the lowest approval rate for homebuyers’ applications in more than three years since Ellie Mae initiated its Origination Insight Report. The dramatic drop in mortgage approvals coincides with the continued difficulties buyer have having, widely cited as a cause for slowing sales and moderating … Read More »

FICO Change Won’t Increase Mortgage Approvals

  Last week FICO announced it would no longer weigh medical debts, which account for about half of all unpaid collections, against debtors as heavily as it has in the past, a move that FICO said could raise some borrowers’ credit scores by as much as 25 points. The revisions, implemented following a study by the Consumer Finance Protection Board … Read More »

Key to Student Debt May be Reducing Monthly Debt Load

Home buyers paying off student loans are being denied mortgages not because their total debt load is too high but because their monthly debt payments exceed totals set by Fannie Mae and Freddie Mac’s underwriting standards, according to an analysis of four years of first-time buyer applications. In an analysis of 46,000 applications from first-time home buyers over a four … Read More »

Down Payments Go Up for First-time Buyers

Fewer first-time homebuyers are finding a way to buy a house with a relatively low down payment as their options shrink and lenders’ down payment requirements rise. From April through June 2014, about 67 percent of first-time buyers made a downpayment of 6 percent or less, down from 74 percent in 2009, according to the latest Realtor Confidence Index report … Read More »

More Loans Close Despite Tight Standards

Latest mortgage data is a puzzlement.  A higher percentage of mortgage applications, including purchase mortgages, closed in June than in the past three years even though lending standards for purchase mortgages are virtually unchanged in a year. The closing rate for mortgages received by lenders in the past 90 days closed in June.  The jump in approvals drove the closing … Read More »

Fed Study Says FHA Lenders Tighten Standards

Tax Headache

A new report from two Federal Reserve economists says lenders have been applying strict underwriting conditions to keep borrowers who can’t afford a large down payment out of the Federally guaranteed program that is designed to make it possible first time and mid to lower income applicants become homeowners. The report sets down in black and white what has been … Read More »

Mortgage Default Risk Now 13 Percent Higher than in 1990s


Despite tighter lending standards enacted by mortgage lenders beginning in 2007 and new regulations like the QM Rule, the risk of mortgages originated today is 13 percent higher than it was in the 1990s. The Default Risk Index for the second quarter of 2014 rose to 113 from last quarter’s revised 112 in our baseline scenario. Under current economic conditions, … Read More »

Why Won’t Buyers Make the Leap?


Halfway through the spring buying season, mortgage applications fell 1.2 percent for the week ending May 21 and the  unadjusted Mortgage Bankers Association’s Purchase Index fell even more.  It was down 2 percent in just one week-15 percent lower than it was a year ago at this time. Such a decline in borrowing to buy a home in the third … Read More »

Down Payments Squeeze First-time Buyers


It’s no secret that raising the cash for a down payment is the toughest hurdle first-time buyers face on the road to home ownership.  For many, government programs like FHA, USDA Rural Development guaranteed loans, VA loans and down payment assistance programs sponsored by state and local housing authorities have made all the difference. Yet requirements by lenders in the … Read More »

Banks Tighten Mortgage Screws


  While everyone from the chairman of the Federal Reserve to millions of home sellers and buyers pleads for a little relief from tight lending standards, the nation’s leading banks are moving in exactly the opposite way. In the latest survey of senior loan officers by the Fed, during the first quarter requirements to get a mortgage became tougher for … Read More »

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