Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Lenders Get Even More Strict With Borrowers
RealtorMag ^ | 10/2/12 | RealtorMag

Posted on 10/02/2012 11:21:45 AM PDT by illiac

Mortgage rates continue to hit new lows, but the ultra-low rates are out of reach for many would-be borrowers who can’t meet strict underwriting standards. And new national data suggests that underwriting standards for getting a loan are getting even stricter, too.

FICO credit scores on all new loans closed in August averaged 750. That is nine points higher than one year ago, according to a survey of about 2 million mortgages by Ellie Mae Inc., a mortgage technology firm used by many lenders. For home owners who refinanced in August, the average FICO score was 769—even higher—at Fannie Mae and Freddie Mac. That is up six points from last August. According to Fannie Mae and Freddie Mac, for home purchasers the average credit score was 763.

The developer of FICO scores, Fair Isaac Co., finds that 78.5 percent of all consumers have scores that fall between 300 and 749. “Barely one in five, in other words, scores high enough to meet today’s FICO score averages at Fannie and Freddie,” The Washington Post reports.

(Excerpt) Read more at realtormag.realtor.org ...


TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: banks; business; ecomony; fannie; homeownership; lenders; mortgages
Housing recovery goes on......(sarc)....
1 posted on 10/02/2012 11:21:54 AM PDT by illiac
[ Post Reply | Private Reply | View Replies]

To: illiac
I'm getting increasingly suspicious about this “Tight Money” banker theme.

Sounds like Hard Left political preparation for direct government intervention.

Anyone remember yesterday?

The same folks were telling us that greedy bankers and “Loose Money” caused the greatest financial crisis since the 1930’s.

2 posted on 10/02/2012 11:31:10 AM PDT by zeestephen
[ Post Reply | Private Reply | To 1 | View Replies]

To: illiac

When I sold my house in 99 in DFW I saw red flags.

When I bought it in 84 I had to have 15% down, when I sold it all the lady had to have was a pay stub. She got in for $400.00.


3 posted on 10/02/2012 11:32:59 AM PDT by hadaclueonce (you are paying 12% more for fuel because of Ethanol. Smile big Corn Lobby,)
[ Post Reply | Private Reply | To 1 | View Replies]

To: zeestephen

Yeh...I’m also seeing reports on MarketWatch that the banks are benefitting hughely from QE3....here we go again!


4 posted on 10/02/2012 11:33:35 AM PDT by illiac (If we don't change directions soon, we'll get where we're going)
[ Post Reply | Private Reply | To 2 | View Replies]

To: zeestephen
I'm getting increasingly suspicious about this “Tight Money” banker theme. Sounds like Hard Left political preparation for direct government intervention.

Yep. The places where they all twitter at one another are abuzz with plans for "public option banks".


5 posted on 10/02/2012 11:33:43 AM PDT by Buckeye McFrog
[ Post Reply | Private Reply | To 2 | View Replies]

To: illiac

they’re tighter for now...if Barry gets re-elected, another EO will undo any “stringent” rules.

rates will go to 1.5% to re-inflate the bubble.


6 posted on 10/02/2012 11:33:46 AM PDT by TurboZamboni (Looting the future to bribe the present)
[ Post Reply | Private Reply | To 1 | View Replies]

To: hadaclueonce

I’m also seeing in MarketWatch that the points being paid to fannie and freddie may go upsignificantly....


7 posted on 10/02/2012 11:35:14 AM PDT by illiac (If we don't change directions soon, we'll get where we're going)
[ Post Reply | Private Reply | To 3 | View Replies]

To: illiac

BFLR


8 posted on 10/02/2012 11:35:19 AM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: hadaclueonce

I drove by last year. Broke down basketball goal in the driveway. No grass, broken garage door window.

Bet she has the free phone.


9 posted on 10/02/2012 11:35:27 AM PDT by hadaclueonce (you are paying 12% more for fuel because of Ethanol. Smile big Corn Lobby,)
[ Post Reply | Private Reply | To 3 | View Replies]

To: illiac
It would have been nice if they had enforced strict underwriting standards BEFORE the subprime mortgage horse had left the barn.
10 posted on 10/02/2012 11:35:52 AM PDT by E. Pluribus Unum (Government is the religion of the psychopath.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: illiac

I wonder if we should re-fi again.


11 posted on 10/02/2012 11:37:05 AM PDT by Tax-chick (Optimism is much shallower than hope.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: TurboZamboni

stringent rules are racist.


12 posted on 10/02/2012 11:37:56 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
[ Post Reply | Private Reply | To 6 | View Replies]

To: hadaclueonce

You and I sold on the first wave, if you sold in ‘99. I sold in 2002. The “appreciation” (read: speculative premium) achieved by the home 2002 > 2007 was MORE THAN THE ENTIRE AMOUNT I SOLD FOR. I bot: $300K, 1995. I sold $500K 2002. It sold for $850K in 2005 and $1.2 MM in 2007.


13 posted on 10/02/2012 11:38:48 AM PDT by Attention Surplus Disorder (This stuff we're going through now, this is nothing compared to the middle ages.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: illiac

it seems as if the elites are creating a “caste system” based on their control of credit scores.


14 posted on 10/02/2012 11:41:09 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
[ Post Reply | Private Reply | To 1 | View Replies]

To: zeestephen

I’m a an ER physician, jtried to refi my mortgage, but because I’m an “ independent contractor” no one will give me the time of day. It’s idiotic. I get 3 or 4 calls a day from recruiters, have never missed a paycheck, could work every day of the month if I wanted to kill myself.


15 posted on 10/02/2012 11:51:48 AM PDT by Kozak (The means of defence again.t foreign danger, have been always the instruments of tyranny at home JM)
[ Post Reply | Private Reply | To 2 | View Replies]

To: illiac

This just sounds like whining spin to appease realtors who are having trouble making sales.

Banks were ordered into the sub-prime market, they got burned and are returning to sane lending criteria.

I remember the 90’s at Seafirst/BofA where the loan officers had to be ordered and trained to approve loans they would have laughed at the month before.


16 posted on 10/02/2012 11:52:12 AM PDT by Psycho_Bunny (Thought Puzzle: Describe Islam without using the phrase "mental disorder" more than four times.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MrB
stringent rules are racist.

And soon, credit scores will be.
Remember you heard it here first.


17 posted on 10/02/2012 11:59:49 AM PDT by Buckeye McFrog
[ Post Reply | Private Reply | To 12 | View Replies]

To: illiac

What really got me is when I met a guy who was trying to refinance a $110K mortgage on a house that is easily worth over a million....and they were giving him a hard time about the appraisal.


18 posted on 10/02/2012 12:02:08 PM PDT by proxy_user
[ Post Reply | Private Reply | To 1 | View Replies]

To: Buckeye McFrog

I think they’re already doing that.

There seems to be a sliding scale on qualifying credit scores depending on your “race”.


19 posted on 10/02/2012 12:05:28 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
[ Post Reply | Private Reply | To 17 | View Replies]

To: MrB

I did it over the phone and said I was black.

You are whatever race you consider yourself.


20 posted on 10/02/2012 12:09:32 PM PDT by Jewbacca (The residents of Iroquois territory may not determine whether Jews may live in Jerusalem.)
[ Post Reply | Private Reply | To 19 | View Replies]

To: proxy_user

Not to cause waves here, but the problem we are having in our area is that the market is improving and the realtors are listing and selling at higher offers than they market can support. Appraisers are still required to utilize sales with the past 6 months (as a general rule - some lenders will allow 12 months), and those older sales are still showing decreased prices. The market needs to keep recovering for the older sales to drop off to support higher appraised values.

The lenders who will let appraisers go back for more than six months are just compounding the whole mess - HUD is one of them.

Now comes the problem of high FICO scores being required, which severely limits the amount of sales available.


21 posted on 10/02/2012 12:11:37 PM PDT by illiac (If we don't change directions soon, we'll get where we're going)
[ Post Reply | Private Reply | To 18 | View Replies]

To: zeestephen

I was at a housing conference last week and there was a mortgage originators panel that discussed this topic. The bank standards are above and beyond those layed out by FHA, Fannie & Freddie. They are called “credit overlays” and it’s due to the banks being scarred by the financial crisis as well as Dodd-Frank and Basel III regulations and they are just unwilling to take on risk. Couple that with FHA and FHFA in disputes as to what is and is not a “Qualified Mortgage” and they are just trying to limit the risk on their side.


22 posted on 10/02/2012 12:13:01 PM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: zeestephen

I think it’s something different. Our massive government debt gets paid off by high inflation and low interest rates. The only way this works is if there is a way to keep most people from borrowing money at low rates while hiding inflation with fudged numbers on the CPI. In the meantime, the government gets cheap money and inflates its way out of debt. In the meantime, savers and lenders are effectively being taxed due to the differential between the two. The inflation/low interest combo is a massive transfer of wealth from those who are lenders and own currency to those who own real inflationary property and have debt.

I think long-term loaning money (without overextending) to buy real inflationary property is going to be the best investment because that is what the government has to have to get itself out the hole it’s in.


23 posted on 10/02/2012 12:28:41 PM PDT by mongrel
[ Post Reply | Private Reply | To 2 | View Replies]

To: illiac
Something amiss here.

My nephew has a good job, but 640 FICO and a wife with bad credit; debt/spending is par with his income, IOW he has no savings. He had to have his mother give him $10K for down and closing. He has been pre-approved on his 640 alone for a $135K house with 3% down and 3.85% on 30 yr fixed

3 years ago I refinanced to get 4.85% 30 yr fixed and had to have 20% equity and the wife and I both are over 800 FICO.

What the hell is going on?

24 posted on 10/02/2012 12:35:43 PM PDT by ChildOfThe60s (If you can remember the 60s....you weren't really there)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jewbacca

next time be transgendered,too. Bonus points ;)


25 posted on 10/02/2012 12:38:52 PM PDT by TurboZamboni (Looting the future to bribe the present)
[ Post Reply | Private Reply | To 20 | View Replies]

To: Kozak
“I’m a an ER physician, jtried to refi my mortgage, but because I’m an “ independent contractor” no one will give me the time of day. “

I do this for a living. If you have been independent at this for at least 2 years, and show a profit on your taxes; you should be ok.
If you are self employed less than 2 years; but have been a doctor long term; it should still work.
We usually really like doctors as they have pretty stable income.

26 posted on 10/02/2012 12:45:41 PM PDT by HereInTheHeartland (Encourage all of your Democrat friends to get out and vote on November 7th, the stakes are high.)
[ Post Reply | Private Reply | To 15 | View Replies]

To: Attention Surplus Disorder
I bot: $300K, 1995. I sold $500K 2002.

"Bot"? Don't you mean "bought"?

27 posted on 10/02/2012 12:59:19 PM PDT by Isabel C.
[ Post Reply | Private Reply | To 13 | View Replies]

To: illiac

I have a Conventional (14 years left on a 30 year) at 7.375. I have about $85,000 in equity on a home valued at around $140,000. Because of trying to expand our business several years ago, we have some hits on our credit. I’d love to re-fi and just lower out payments, but there is no way any lender would do it. We are barely scraping by. If only I were “poor” I’m sure Obama would help me. S/


28 posted on 10/02/2012 1:14:48 PM PDT by manic4organic (We won. Get over it.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: illiac
The property being bought is almost as important as the buyer. Banks are scrutinizing the homes alot more than before. If the property has two separate tax lots that can be divided, forget it they will not finance. Too much acreage and not a big enough home on that acreage, forget it they will not finance.

I know this from experience I sell homes for a living and it is so bad right now but on the other hand so good. Low interest rates, lowest in 50+ years and incredible buys out there, it has really picked up this year in my area, southern Oregon, we are all very busy.

29 posted on 10/02/2012 3:31:25 PM PDT by thirst4truth (www.Believer.com)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jewbacca; MrB

My husband is American Indian, but we’ve always met our credits needs as white people.


30 posted on 10/02/2012 4:22:13 PM PDT by Tax-chick (Optimism is much shallower than hope.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: hadaclueonce

exactly. It’s good that lenders are being strict now instead of creating a new bubble


31 posted on 10/03/2012 12:47:56 AM PDT by Cronos (**Marriage is about commitment, cohabitation is about convenience.**)
[ Post Reply | Private Reply | To 3 | View Replies]

To: ChildOfThe60s
Depends on age as well -- future earning potential. If you are in your 50s banks will gauge that you have 15 odd years of earning, while your nephew is probably younger.

Credit worthiness is a complicated calculation and different banks have different calculations

32 posted on 10/03/2012 12:51:58 AM PDT by Cronos (**Marriage is about commitment, cohabitation is about convenience.**)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Kozak
Re: “Independent Contractor and Re-Fi”

I did not realize the “Contractor” issue went so far up the financial food chain.

My company has a large Temp work force, many of them quite well paid, and many others who have been with us for as long as 5 years (48 weeks on, 8 week layoff).

I've talked to 4 different people who have tried - and failed - to re-fi or purchase.

All 4 were trying to finance with guarantees from the VA or FHA.

In their cases it's the federal government that stops the transaction, not the banks.

As soon as the Feds hear the word “Temp,” it's “Sorry, no guarantee.”

33 posted on 10/03/2012 2:12:26 AM PDT by zeestephen
[ Post Reply | Private Reply | To 15 | View Replies]

To: ChildOfThe60s
What the hell is going on?

The FED and the Federal government are trying to prop up housing values by any means possible.

The FHA loan is the new sub-prime. The FHA backs about 25% of all new home loans. It was under 5% before the housing bust. According to Dr. Housing Bubble, about 1 in 6 of these loans are in some form of delinquency.

From the information you have given, it appears your nephew and NIL are likely going to be another statistic. It really comes down to whether they are buying too much house. If they are still living pay check to pay check after buying, they probably shouldn't.

34 posted on 10/03/2012 3:57:55 AM PDT by EVO X
[ Post Reply | Private Reply | To 24 | View Replies]

To: HereInTheHeartland

I changed jobs in Jan and so thats the problem.
I’ve got a list of the banks that have turned me down, and
can’t wait till they try to get me to bank with them in the future. I still won’t shop at Sears after they refused me credit when I was a medical student ( with an income and a working wife).


35 posted on 10/03/2012 5:09:01 AM PDT by Kozak (The means of defence again.t foreign danger, have been always the instruments of tyranny at home JM)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Tax-chick

“My husband is American Indian, but we’ve always met our credits needs as white people.”

Oh, I have an 800+ FICO and no debt but a house that is 1/3 my annual income.

I just say I am black to do my part to screw up the statistics.


36 posted on 10/03/2012 8:20:00 AM PDT by Jewbacca (The residents of Iroquois territory may not determine whether Jews may live in Jerusalem.)
[ Post Reply | Private Reply | To 30 | View Replies]

To: Cronos

The real reason they are being super-strict is they expect us to enter into an inflationary period making fix-rate loans money losers.


37 posted on 10/03/2012 8:23:12 AM PDT by Jewbacca (The residents of Iroquois territory may not determine whether Jews may live in Jerusalem.)
[ Post Reply | Private Reply | To 31 | View Replies]

To: Jewbacca

LOL!


38 posted on 10/03/2012 9:17:53 AM PDT by Tax-chick (Optimism is much shallower than hope.)
[ Post Reply | Private Reply | To 36 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson