Posts Tagged ‘lending’

Mortgage Lending Getting Riskier

Posted on October 09, 2017 by Laura Lam

During the second quarter this year, the risk in mortgage lending inched up as the market shifted toward an increased share of investor loans, according to the Q2 2017 Housing Credit Index released by Core Logic.  The index increased to 117 during the second quarter, up a full 20 points from the second quarter last year. However, even after this increase, the credit risk in the second quarter is still within the levels seen from 2001 to 2003, a timeframe that is considered to be a normal baseline for credit risk. The chart shows that while mortgage risk remains at…

Purchase Lending Hits 10-Year High

Posted on September 12, 2017 by Laura Lam

During the second quarter of 2017, purchase originations jumped significantly even as refinances shrank, according to Black Knight Financial Services’ latest Mortgage Monitor report.  First lien mortgages jumped 20% from the first quarter and 16% from last year to $467 billion in the second quarter. During the second quarter, refis fell 20%, or $37 billion, from the second quarter to 31% of the market share of originations, the lowest level in 16 years.  However, the 57% quarterly surge in purchase originations more than made up for the fall in refis. This is an increase of 6% from last year to $321…

Small Business Borrowing Hits 2 Year High

Posted on August 01, 2017 by Laura Lam

Borrowing by small U.S. companies hit a nearly two-year high in June, driven by restaurants and hotels, PayNet Inc said on Tuesday, as businesses invested to meet customer demand.  The Thomson Reuters/PayNet Small Business Lending Index for June rose to 139.9, its highest since July 2015, from an upwardly revised May reading of 138.3. Small business borrowing is a key barometer of growth because those companies do much of the hiring that drives economic gains.  Still, measured from a year earlier, borrowing was flat, according to the provider of credit ratings on small companies. “It really tells me they are…

Mortgage Credit Availability at Highest Level since 2016

Posted on July 21, 2017 by Laura Lam

Credit availability remained historically tight in the first quarter of 2017, but increased slightly from the previous quarter to the highest level since 2016.  The Housing Credit Availability Index (HCAI)  from the Housing Finance Policy Center shows mortgage credit availability increased to 5.4 in the first quarter. This is up from 5.2 in the fourth quarter.  However the chart, which uses data from eMBS, CoreLogic, HMDA, IMF and the Urban Institute, shows this is still extremely tight compared to historical standards. The HCAI measures the percentage of home purchase loans that are likely to default, go unpaid for more than 90 days past their due date….

Banks Rethink Credit Scores as Changes Take Effect

Posted on April 12, 2017 by Laura Lam

Come July, TransUnion, Experian and Equifax will no longer include information about tax liens and civil judgments on a consumer’s record if the data doesn’t include the person’s name, address, Social Security number and date of birth. Many liens and most judgments don’t include all that data, in part because Social Security numbers are often redacted for security reasons. Some consumers could see their credit scores rise with the removal of such black marks. Whether this change is a good thing depends on whom you ask.  Some observers note that tax lien and civil judgment information is sometimes attached to…

Tappable Equity Hits 10-Year High

Posted on April 05, 2017 by Laura Lam

An annual home price appreciation of 5.5% during 2016 helped to increase the number of mortgage holders with tappable equity to 39.5 million, according to new data from Black Knight Financial Services (BKFS). More than two-thirds of the tappable equity level belongs to borrowers with current interest rates below today’s 30-year interest rate. Tappable equity – defined as the amount of lendable equity available to a borrower before hitting a combined loan-to-value ratio of 80% – reached the $4.7 trillion mark last year. An equity growth of $570 billion throughout 2016 pushed the total equity level to its highest level since…

The Housing Crisis: 10 Years Later

Posted on April 03, 2017 by Laura Lam

CoreLogic recently released a report entitled, United States Residential Foreclosure Crisis: 10 Years Later, in which they examined the years leading up to the crisis all the way through to present day. In 2010, at the peak of the Great Recession, nearly 1.2 million U.S. homes went through completed foreclosures, nearly 5 times as many as in 2000 and about double the number of completed foreclosures in 2007, the year the housing crisis really took off. Many economists mark the beginning of the foreclosure crisis with the collapse of two Bear Stearns subprime funds in June 2007, with the crisis deepening as a…

Foreclosure Activity Hits 11-Year Low

Posted on March 24, 2017 by Laura Lam

Foreclosure activity dropped in February to an 11-year low, according to new data from ATTOM Data Solutions.  This decrease marks the lowest point since November 2005, and the 17th consecutive month of annual decreases.  But despite this drop, 10 states still saw an increase in foreclosure activity. States that saw the largest increases include New Jersey with an increase of 16%, Delaware with 14%, Louisiana with 12%, Alabama with 10% and Hawaii with 8%.  Some cities also saw strong increases, contrary to the national trend. Houston, Texas, for example, increased 97% from an abnormally low February 2016. Other cities such as…

Millennials Locked Out of Housing Market Again

Posted on March 14, 2017 by Laura Lam

For quite some time, we’ve heard that Millennials have put off buying a home.  These reasons include student debt load, tighter lending standards, and simply not wanting to sacrifice everything for a chance to own the “American Dream.”  Whether Millennials actually want to buy a home or not, there has to be homes available to purchase.  Currently, young home shoppers have a very shallow pool of options – and the current inventory shortage is predicted to stick around through 2017. Daren Blomquist, senior vice president at ATTOM Data Solutions, identified 3 key factors keeping housing inventory in a drought, barring entrance for aspiring…

Lending Trouble Lies Ahead in 2017

Posted on January 04, 2017 by Laura Lam

Mortgages, commercial-and-industrial loans, subprime auto lending and student lending are ripe for setbacks and, in some cases, crises in 2017.  Here is a breakdown of each of those risk factors, the reasons behind them and the possible upsides or alternative strategies. Mortgages – The refinance market has largely carried the mortgage industry over the past few years because consumers took advantage of historically low rates. Now that the Federal Open Market Committee has raised rates twice in the past year, and the benchmark 10-year Treasury has spiked upward since the presidential election, many expect the refinancing market to nosedive.  “We’ll…