Report: Mortgages slightly easier to get as standards ease


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Posted Online: March 22, 2013, 7:04 pm
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Credit standards for mortgages appear to be easing just a bit, according to an analytical study and reports from front-line lenders.

The average borrower credit score for a closed loan dropped from 749 in January to 745 in February, Ellie Mae Inc., a provider of software to home lenders, reported Friday. Though still steep, it was the lowest average score since last May, said Jonathan Corr, Ellie Mae's chief executive.

The average down payment for a home purchase was exactly 20 percent, the report said — the first time it's been that low since July.

And the percentage of total income that borrowers were being allowed to devote to debt payments averaged 35 percent — the highest since June, Corr said, "suggesting that the credit box may be expanding."

In the meantime, the mix of purchase versus refinance mortgages shifted toward the former, reflecting improved buyer confidence and a recent increase in mortgage rates, which dampens demand for refinances. In February, 32 percent of all closed loans were for purchases, compared with 27 percent in January.

In another sign of easing mortgage standards, a few banks are now providing home-equity lines of credit for as much as 90 percent of the home value, up from 80 percent, said Mark Cohen, a Beverly Hills, Calif., mortgage banker.

That means that someone owing $350,000 on a $500,000 house might get a $100,000 credit line instead of one for $50,000 — assuming they have a minimum credit score of 720 and can fully document their ability to make payments.

Cohen said he's also seen a slight loosening of borrower worthiness gauges such as the debt-to-income ratio. "There's a slight credit easing, but in a subtle way," he said.

For people with less than 20 percent down payments, mortgage insurance is now easier to get, said Jeff Lazerson, a Laguna Niguel, Calif., mortgage broker.

And "delayed" financing, unavailable in recent years, is back, Lazerson said — someone who paid cash for a one- to four-unit property may be able to get back up to 75 percent of their money by taking out a loan right away, instead of having to wait for six months.

















 




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  Today is Tuesday, Sept 2, the 245th day of 2014. There are 120 days left in the year.

1864 — 150 years ago: It is estimated that 300,000 people attended the recent Democratic convention in Chicago when Gen. George B. McClellan of New Jersey was nominated as a candidate for president of the United States.
1889 — 125 years ago: Alderman Frank Ill, Winslow Howard and Captain J.M. Montgomery returned from Milwaukee, where they attended the national Grand Army of the Republic encampment.
1914 — 100 years ago: Three members of the Rock Island YMCA accepted positions as physical directors of other associations. Albert Cook went to Kewanee, C.D. Curtis to Canton and Willis Woods to Leavenworth, Kan.
1939 — 75 years ago: Former President Herbert Hoover appealed for national support of President F.D. Roosevelt and Congress in every effort to keep the United States out of war.
1964 — 50 years ago: The Rock Island Junior chamber pf Commerce has received answers to about 65 % of the 600 questionnaires mailed out recently in a "Community Attitude Survey" to analyze sentiments of citizens towards their city's various recreational, educational, and civic service programs.
1989 — 25 years ago: The two thunderstorms passing through the Quad Cities last night and early today left some area residents reaching for their flashlights.






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