Posts Tagged ‘underwriting’

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…

Delinquency Rate Near 10-Year Low

Posted on August 16, 2017 by Laura Lam

The mortgage delinquency rate reached its lowest point in nearly a decade in May due to tighter underwriting, according to CoreLogic. Also improving mortgage performance were employment growth and rising home prices. About 4.5% of mortgages were in some stage of delinquency in May, a decline of 0.8 percentage point from the previous year when the overall delinquency rate was 5.3%. The serious delinquency rate in May remained unchanged from April at 2%, and was at its lowest since November 2007 when it was also 2%. Frank Martell, CoreLogic president and CEO, credits underwriting practices for the delinquency rate improvements.  “A prolonged…

First-Time Homebuyers Deterred by Misconceptions

Posted on May 25, 2017 by Laura Lam

The lack of knowledge around the home purchase process was cited by 39% of mortgage executives as the leading barrier keeping potential first-time buyers from entering the market.  That topped a lack of inventory (29%), excess student loan debt (27%) and rising interest rates (6%), according to a survey taken during the Mortgage Bankers Association’s National Secondary Market Conference by Genworth Mortgage Insurance. The greatest cause of confusion among first-time homebuyers is the role of a 20% down payment.  Of those surveyed, 28% said consumers still mistakenly believe that a 20% down payment is a requirement for purchasing a home,…

Has Auto Lending Lost Its Luster?

Posted on November 10, 2016 by Laura Lam

Regulators have been warning about frothy conditions in the market for automobile loans. But things had to hit close to home – shrinking loan yields and rising delinquencies – before bankers really paid attention.  Now, several companies said that they plan to scale back indirect auto lending, citing increased competition and narrowing spreads. Others are reducing exposure by selling off large chunks of auto loans – though those banks insist they remain committed to auto lending. Their moves come at a time when auto lending has reached record highs. The volume of auto loans made by banks, credit unions and…

People Are Still Seeing Red Over the Housing Collapse

Posted on May 05, 2016 by Laura Lam

The nation’s housing markets may be finally getting over the foreclosure crisis, but for many Americans the anger hasn’t subsided.  This recent home sale in Florida may be the perfect encapsulation of the fury felt by some of the more than 5 million Americans served with a foreclosure notice after the housing bubble burst. This 5-bed, 4-bath home in the Lake Cypress Cove suburb of Orlando was valued at $2.7 million back in 2006. We all know what happened next – the collapse in U.S. home prices sent millions of Americans into foreclosure and sparked a Great Recession.  The house…

Underwriting and Cyber Risk On the Rise

Posted on December 21, 2015 by Saldutti

Credit risk, interest rate risk and cybersecurity concerns pose growing risks, according to a semiannual risk report issued the Office of the Comptroller of the Currency.  It found that institutions are continuing to loosen underwriting standards for a number of loan categories to search for yield in a low interest-rate environment. “In the area of credit risk, the warning lights are flashing yellow. Regulators and bank management need to act now to prevent those risks from becoming reality,” said Comptroller of the Currency Thomas Curry.  “We can’t afford to wait until the warning lights turn red.” The report found that…