Different Standards From Mortgage Lenders
As the housing market continues to recover, demand for mortgages increased during the second quarter of the year but the difference in credit standards between larger and smaller lenders appears to be growing. This is according to Fannie Mae, which tracks current lending activities.
There is industry agreement; it is not easy for consumers to get a mortgage today as some lenders are tightening their credit standards more than others. In Fannie Mae's "Lender Sentiment Survey," they found smaller and mid-size lenders are more likely than larger lenders to report their credit standards tightened over the past quarter. These same lenders also said they are more likely to tighten them even more in the next three months.
The larger lenders, on the other hand, were more likely to say they have eased credit standards and they expect to continue to ease requirements over the next few months.
The most common reason for increasing credit standards as reported by small to mid-size lenders in the survey was regulatory requirements. For example, in January, the qualified mortgage rule took effect, which aims to protect consumers by strengthening underwriting standards. This rule requires, among other requirements, all mortgage applicants to do full documentation of income, assets, and employment; have a maximum of 3 percent for points and fees; and has a cap of 43 percent on the back-end debt-to-income ratio.
As costs rise many smaller lenders may be applying more conservative standards to slow down this portion of their business while they find ways to manage increased costs. It would appear the large lenders are better equipped to manage the increased regulatory costs.
The Fannie Mae survey did report, overall, that lenders reported positive expectations for mortgage demand throughout the remainder of the year but with only modest growth.
For consumers who are considering buying a home the message is clear, talk to more than one lender and although I have not been a fan of the larger lenders, now may be a good time to add one to your mix of conversations.
If you have any questions or would like more information about the Fannie Mae survey, please let me know. I can be reached at the MagnumOne Realty office in Roseville (916-899-6571) or by email to email@example.com. I would love to hear from you.
Julie Jalone, wife and mother living in Rocklin, is an experienced professional Realtor ® serving
the Greater Sacramento area including Placer, El Dorado, Yolo and Yuba counties.
Julie may be reached online at www.jalone.com or by calling (916) 276-6883
Check out her daily web blog: Keep it Real in Sacramento
Pet Care | Real Estate | Restaurants | Tech | View All | * Add/Upgrade Business
Placer County News HeadlinesRoseville Man Arrested on Sexual Battery ChargeDetectives arrested Quin Wilde Mack, age 38 of Roseville, on suspicion of sexual battery
Managing Alzheimer's Behaviors Lecture Coming Up"Alzheimer's behaviors: How do I manage them?" will be the subject of the next UC Davis Alzheimer's Disease Center Community Discovery Lecture Series
Rocklin Hot Chili & Cool Cars set for September 19thROCKLIN- It's a special year for Hot Chili & Cool Cars. This year, the event honors a decade of giving back to the Matthew Redding Scholarship Foundation
Roseville's John Adams Charter School Celebrates GrowthOfficials and students from John Adams Academy (JAA) charter school will host an official dedication and ribbon cutting ceremony for the newly acquired Washington Building
First Phase of Placer Parkway Gets Supervisors Go AheadThe Placer County Board of Supervisors voted unanimously to allow planning to proceed for the first phase of the Placer Parkway road project just outside Rocklin, Roseville and Lincoln.
Roseville Invited to Comment Tonight on Social Host OrdinanceRecently the Placer County Youth Commission, which includes several student representatives from Roseville and Granite Bay as well as other parts of Placer County, approached Roseville's
Roseville Man Arrested in House Party RobberyBrent Leo Alan Mason, age 19 of Roseville, was arrested without incident at an apartment complex in Rocklin
Pink By The Pool September 17th at Thunder Valley CasinoThe Placer Breast Cancer Foundation is hosting the annual Pink By The Pool fundraising event, Thursday, Sept. 17 at Thunder Valley Casino.
Feed My Starving Children Dinner in Roseville September 12thROSEVILLE - The annual Feed My Starving Children dinner on Sept. 12th will help raise money to pack meals for malnourished children around the world
O2 breathe Walk in Roseville set for October 10thO2 breathe fundraising Walk, benefiting the Pulmonary Hypertension Association on Saturday, October 10, 2015 at Maidu Park in Roseville.
Roseville Gas Price Battle: Costco vs. Sam's ClubRoseville, CA - Roseville gas prices continue to drop bringing welcome relief to motorists. The price war between Costco and Sam's Club in Roseville continues to benefit consumers
California Fire Updates Summary (8-29-15)California Fire Updates 2015: Although 6,300 firefighters remain on the lines battling 13 active wildfires, crews made significant progress over the past couple of days.
NEWS: In Case You Missed It