News by Subject
Complete list of specialty news sections.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Mortgage Industry News
Subscription-based news for people who work in real estate finance.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories for your web site or for your RSS reader.

News Archives
Archive of news entries.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Graphs
Directory of lenders, branch operators and mortgage service providers.
home advertise email RSS about us
HOT Topics Rates Glossary LO License Search
Consumer Mortgage News
Free mortgage news for current and prospective borrowers from a leading online mortgage industry news publication.

Trouble Qualifying for a Mortgage? Try Again Later

Lenders tighten guidelines as demand rises

Aug. 17, 2016

By SAM GARCIA Mortgage Daily

portrait of Sam Garcia

Consumers whose credit scores are not among the highest might want to wait until early next year before financing a home purchase or refinancing.

Data from Ellie Mae Inc., a major provider of technology for the mortgage industry, indicates that FICO scores on closed loans averaged 727 in July 2016.

Not only were average credit scores higher than 726 the previous month, but they have increased each month since January 2016, when they averaged 719.

Higher credit scores on closed loans mean that fewer consumers with lower scores are being approved for a home loan.

So why have average credit scores been on the rise?

This is likely due to increased demand.

Mortgage lenders have an infrastructure that can only handle so much loan volume. Expanding the infrastructure and hiring more employees is a longer-term decision based on expected future lending volume.

Recently, interest rates have unexpectedly declined -- making the monthly payments on homes more affordable and increasing the number of existing mortgage borrowers who could benefit from a refinance.

In turn, the number of people applying for residential loans has been greater than what lenders had previously anticipated.

So with infrastructures that can only handle a limited amount of loan volume, lenders are forced to moderate business by tightening lending requirements.

For instance, during the first quarter of this year, economists at secondary mortgage lender Freddie Mac estimated that mortgage originations totaled $385 billion.

During that same period, FICO scores averaged roughly 720 based on Ellie's data.

But during the second quarter, when Freddie estimated $535 billion in U.S. mortgage production, average credit scores climbed to around 724.

The continued increase in average scores during July came as Freddie forecasts $595 billion in third-quarter originations.

So if you're a consumer whose been declined for a loan recently, you might want to try again when mortgage lending slows down.

Based on Freddie Mac's forecast, mortgage originations are expected to fall to $485 billion in the fourth quarter of this year and tumble to $340 billion in the first quarter of next year -- likely making the first few months of 2017 a more fertile time for loan approvals.

next story

back to home page

Refinance News
News about refinance programs, pricing and production.
H A R P 2.0 News
News stories about the H o m e Affordable Refinance Program including expanded program guidelines.

Copyright © 2016 Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

pricing engine directory

wholesale lender directory

More Mortgage News Resources ( full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

refinance news

reverse mortgage news

sales blog

secondary marketing

servicing news

subprime news

wholesale lenders

wireless mortgage news