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.
Follow Us On Facebook
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 Crime and Police Activity Updates (12.9.16)Roseville, CA- Roseville's latest police activity digest for the period covering the dates of November 29-December 7, 2016.
9 Holiday Shopping & Safety TipsThe Roseville Police Department wants everyone to have a great, safe shopping experience in Roseville.
Women's West Coast Tournament of Champions returning to RocklinRocklin, CA - On Dec. 17-18 the Women's West Coast Tournament of Champions (WWCTOC) returns to Hardwood Palace in Rocklin
David and Dolly Fiddyment Awarded for Achievements in PhilanthropyRoseville, CA - The Association of Fundraising Professionals California Capital Chapter awarded David and Dolly Fiddyment with the 2016 Outstanding Philanthropists Award
9 Interesting Facts about Winter Home SalesSacramento area Realtor Julie Jalone of MagnumOne Realty in Roseville writes about a recent Redfin real estate study which indicates sellers should not discount the winter months to list their homes.
New California Laws 2017 (Part 3)New California laws for 2017. Part 3 includes pro sports teams, bankruptcy, state employees, foster care, voting rights, organ transplants, marijuana and more.
Autism: Great Minds Don't Always Think AlikeSteve Silberman will present "Great Minds Don't Always Think Alike," a deep look at the hidden history of autism and the promise of a future
$1 Million Grant Targets Chronic Homeless in Placer CountyPlacer County will receive a $1 million grant from Sutter Health to help house its chronically homeless population under a grant agreement approved
Martis Valley Groundwater Management UpdatePCWA Board approves alternative submittal for the Martis Valley Groundwater Basin.
Robert Dugan joins Sacramento Metro ChamberThe Sacramento Metro Chamber announced that Robert Dugan will join the organization as Senior Vice President of Public Policy & Economic Development
Roseville Councilmembers to be Sworn In December 7thRoseville, CA - Newly-elected Roseville City Councilmembers Bonnie Gore, John Allard and Scott Alvord will be sworn in on Wednesday, December 7th.
$250,000 for Local Nonprofits Working on Mental Health IssuesRoseville, CA - Placer Community Foundation recently made $250,000 in grants for mental health prevention and early intervention in Placer County.
NEWS: In Case You Missed It