Underwriting Standards to Ease on RMBS Loans
Next year will see a slow return for non-agency residential mortgage-backed securities, while underwriting standards will be relaxed. Borrowers on loans not designated as Qualified Mortgages will pay more than QM borrowers.
Bankruptcy Filings On Pace for Six Year Low
Bankruptcy filings tumbled last month, with filings on pace to come in at the lowest level in six years. Consumer bankruptcies might fall below a million for the first time in six years.
Purchase Closing Rates and FHA Credit Scores Fall
A smaller share of applications for purchase financing converted to closings last month, while turnaround for all loans slowed. Credit scores on government originations fell even as conventional scores moved higher on refinances.
Freddie Updates Underwriting Requirements
Among several guideline updates announced by Freddie Mac are enhanced quality control tracking, fraud training requirements for third-party vendors and requirements for the Ability to Repay rule. Also addressed are higher-priced loans, credit verifications and refinances.
Lenders Lower Credit Score Requirements
A measure of the availability of credit for residential financing turned higher last month as a result of an easing of credit score requirements. Still, lending standards remain near their tightest levels in the past decade.
Bankruptcy Filings Turn Higher
After falling in September, the number of consumers who filed bankruptcy increased last month. However, the increase is considered an aberration.
Diminishing Refis Do Little to Ease Credit Standards
The decline in residential loan business that resulted from the recent increase in interest rates did little to convince bankers to loosen their purse strings.
Tool Helps Predict Bankruptcy
The latest iteration of a risk score product promises to helps mortgage lenders better identify prospective borrowers who are likely to file bankruptcy.
Financial Health of Prospective Borrowers Deteriorates
The financial health of prospective mortgage borrowers grew weaker on a quarterly basis thanks to increased financial pressure.
Closing Rate Worse Despite Better Credit Conditions
While the ongoing trend of mortgage lenders easing credit standards continues, a smaller share of loan applications are closing. Average credit scores on government-insured refinances fell four points last month.
Mortgage Lenders Tighten Purse Strings
For the second month in a row, residential lenders have been more restrictive in their mortgage lending practices. But the changes are minimal compared to changes from pre-crisis levels.