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 firstname.lastname@example.org. 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 & Rocklin: Top 10 Free Things To DoRoseville, CA- Having a great time can get expensive. It doesn't always have to be. If you're looking to cut back or have a growing family, it's time to get a little creative
Former NFL QB Jeff Kemp to Speak at Catta VerderaFormer NFL quarterback Jeff Kemp will be guest speaker Thursday, Sept. 8 at Catta Verdera Country Club in Lincoln.
California Fires Update Summary (8.27.16)Over 12,300 firefighters are battling 10 large wildfires in California. Despite mild temperatures yesterday, dry and gusty conditions
Music: 10 Great Albums Worth a ListenRoseville, CA- Music tastes are as subjective as it gets, but few things are as fun as music opinions.
California's Return-to-Prison Rate FallsThe rate at which people return to prison has consistently trended downward since fiscal year 2005-2006 when the rate was 67.5 percent.
Rocklin Flash Crime Report (8.26.16)Rocklin, CA- Police activity digest update in Rocklin for the period covering August 15- 21, 2016.
Food Truck Cinema Sept. 16 at Woodcreek Golf ClubRoseville, CA- Woodcreek Golf Club in Roseville will host its inaugural Food Truck Cinema on Friday, Sept. 16 at its driving range.
Sutter Roseville Medical Center Foundation Benefit Golf TournamentRoseville, Calif. - On Sept. 9, Sutter Roseville Medical Center Foundation will host its 30th Annual Benefit Golf Tournament and Dinner
Hope for Less Invasive Tests for Bacterial Infections in Babies(SACRAMENTO, Calif.) - Physicians from Children's Hospital of Michigan, UC Davis Medical Center and Nationwide Children's Hospital, in collaboration with 19 other pediatric emergency departments
Legislature Votes to Extend Emergency Tax ReliefSacramento - Legislation sponsored by Board of Equalization Member George Runner and fellow BOE members cleared the Legislature yesterday when the State Assembly
WJU School Year Begins Amidst Continued GrowthROCKLIN, Calif. - William Jessup University began its 2016-17 academic year August 22 with the largest enrollment in the university's 77-year history.
Molly Ringwald at Rocklin's Quarry Park September 17thRocklin, Calif. - Golden Globe nominated actress and jazz musician Molly Ringwald descends into Rocklin's Quarry Park Amphitheater on Saturday, September 17
NEWS: In Case You Missed It