Mortgage Lending is NOT Out of Control

    1Money-On-Trees-KCM

    This year, both Freddie Mac & Fannie Mae have introduced new programs that only require a 3% down payment on a mortgage in order to purchase a home. Earlier this month, the Mortgage Bankers’ Association reported that adjustable-rate mortgages (ARMs) may be making a slow comeback as the share of ARMs increased to 7.4 percent of total mortgage applications. Some see this loosening of lending standards as a point of concern.

    We know that the ridiculously low lending standards of the early 2000’s were part of the reason a housing bubble formed and burst last decade. Some are worried that we are headed down the same road that caused that housing crisis.

    However, a recent survey of a distinguished panel of over 100 economists, investment strategists, and housing market analysts conducted by Pulsenomics showed the vast majority disagree. The survey revealed that only 4% of the experts felt that over the next twelve months lending standards would “ease too much, become too lax”.

    Here are the results of that survey:

    2Mortgage-Access-KCM

    Bottom Line

    There is no question that lending standards are easing; thereby giving more families the opportunity of accomplishing the American Dream of homeownership. However, we are not going back to the ridiculousness of the last decade.

    Trackback from your site.

    Leave a Reply