• 800.539.8014
  • Buyer
  • Seller
  • Offices & Agents
  • About
    • Blog
    • Careers
  • Real Estate School
  • Contact

Century 21 Nachman Realty

We Are Where You Are.

MENUMENU
  • Commercial
  • Rentals
    • Apt Rentals
    • Property Management
    • Rental Search
  • Mortgage
  • Foreclosures
  • Relocation
    • Community Info

Lending Standards: Are They Actually Loosening?

May 2, 2013 By admin

money lockIn a recent story on MSN Money titled, Mortgage Borrowing Is Getting Easier, it was revealed that:

“Credit is not raining down on would-be borrowers, but it will be a bit more accessible this year.”

The article bases it findings on the Federal Reserve’s January Survey of Loan Officers. Dan Greene of the Daily Mortgage Report addresses the survey:

“The Q4 2012 survey marks the ninth straight survey in which fewer than 10% of banks tightened standards. Many more are loosening instead. It’s a good sign for the 2013 home purchase market, which has shown strong buyer demand and rising home prices. Despite what you may hear from friends and neighbors, the nation’s banks are no longer tightening their respective mortgage lending standards.”

In the article, Cara Hawkins, a production manager at Ameripro Funding also weighed in on the subject:

“There are more players in the mortgage buying ‘game’ than in past years, which opens the door to looser credit standards because the appetite for loans on the secondary market is higher. While it is still fairly black and white when it comes to mortgage qualification, I am seeing an increase in more approvable loans than in past years because of the market opening up.”

And a recently released report from FICO/PRMIA, US Consumer Credit Risk Trends and Expectations showed:

Expectations among bank risk professionals for the relaxation of lending standards increased sharply, rising from 12.1 to 19.9 percent

Why Are Lending Standards Easing?

The FICO/PRMIA report revealed two reasons for the industry’s current comfort with the housing market.

  1. 83.7% believe that the level of mortgage delinquencies will decrease or stay the same, a significant improvement over last quarter.
  2. 70.8% feel that home prices were rising at a sustainable pace.

The Niche Report also covered the FICO/PRMIA report explaining:

“One out of five bank risk professionals now expect the approval criteria for loans to become less stringent, the third highest level ever registered for looser lending standards in the three year history of the FICO survey.”

What Will This Mean for the Real Estate Market?

Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs, said it best:

“The latest survey results, combined with data that indicates the real estate market is improving in many regions, paint a positive picture for a sector of the economy that has been slow to join the recovery. Mortgage lenders have been understandably guarded over the past five years. The improvement in their sentiment should be welcome news, and I wouldn’t be surprised to see lenders cautiously expanding their mortgage and home equity lending businesses.”

Share

Contact Us

Century 21 Nachman Realty
  • Agent Login

Office Locations

Chesapeake/Suffolk


3325 Taylor Rd., Suite 107
Chesapeake, VA 23321
(757) 638-5700
(800) 556-1611
(757) 638-5800

Norfolk


1512 East Little Creek Rd.,
Norfolk, VA 23518
(757) 480-2121
(800) 441-2112
(757) 480-0324

Elizabeth City


1880 West City Dr., Suite B,
Elizabeth City, NC 27909
(252) 331-1300
(866) 288-7413
(252) 331-1325

Virginia Beach/Chesapeake


1201 Lake James Dr., Suite 201,
Virginia Beach, VA 23464
(757) 424-0202
(800) 539-0238
(757) 424-9531

Newport News


720 Thimble Shoals Blvd.,
Suite 116,
Newport News, VA 23606
(757) 833-8400
(800) 539-8014
(757) 833-0545

Williamsburg


1031 Richmond Rd.,
Williamsburg, VA 23185
(757) 220-8205
(800) 369-8206
(757) 229-3196

Kitty Hawk


4628 North Croatan Hwy.,
Kitty Hawk, NC 27949
(252) 261-6400
(800) 252-6401
(252) 261-1400

At the Beach


1092 Laskin Road, Suite #204,
Virginia Beach, VA 23451
(757) 264-6530
(757) 233-7921

Gloucester County Office


5103 George Washington Memorial Highway,
Hayes, VA 23072
(804) 331-0422
(800) 539-8014
(757) 833-0545

Copyright © 2023 Nachman Realty LLC. All rights reserved.

CENTURY 21® and the CENTURY 21 Logo are registered service marks owned by Century 21 Real Estate LLC. Nachman Realty, L.L.C. fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each office is independently owned and operated. Any services or products provided by independently owned and operated franchisees are not provided by, affiliated with or related to Century 21 Real Estate LLC nor any of its affiliated companies.

CENTURY 21® is a registered trademark licensed to Century 21 Real Estate LLC.

Equal Housing Opportunity. Each Office Independently Owned and Operated.