Home Lending at Its Lowest Point in 14 YearsPosted by Mary Fusinski on Nov 18, 2011 in Blog | 0 comments
Daily Real Estate News | Tuesday, August 09, 2011
Mortgage rates are near record lows and housing affordability is at its highest in years, but lending is at its lowest point since 1997. What’s more, new mortgages are down by a third compared to 2010.
Lenders will write about $1 trillion in home loans this year, the fewest number since 1997, according to the Mortgage Bankers Association. MBA projects that home lending will fall even lower in 2012.
“There is a burnout phenomenon,” Mortgage Bankers Association economist Michael Fratantoni said. Refinancers have stopped refinancing due to declines in home prices and with many now being underwater on their homes. “Borrowers who couldn’t qualify for 4.5 percent mortgages last year for the most part still can’t qualify this year,” Fratantoni said.
The tightening of credit and falling home prices have certainly limited lending, but some lenders are starting to ease terms for the first time since the housing crisis began.
“All those granular issues we were beating people up about over the last three years seem to be going away,” says Jeff Lazerson, a Laguna Niguel mortgage broker. “The hassles over old credit inquiries. Having to explain every entry on a bank statement.”
In fact, Wells Fargo & Co. and Bank of America Corp. say they’ve eased their credit standards slightly for loans backed by the Federal Housing Administration, which tend to be attractive to first-time buyers because of their small down payment requirements.
Mortgage Lending at Lowest Level Since 1997,” Los Angeles Times (Aug. 6, 2011)